Oil price worries negatively impact share market

By Hiran H.Senewiratne

The CSE weakened further yesterday with indices declining amid lower turnover as investor sentiment turned bearish due to budgetary worries and month- end profit- takings. But stock market analysts worried over the possibility of world oil prices going up in future because the Organization of Petroleum Exporter Countries (OPEC) had decided to cut global oil supplies.

Shares slipped over 1 per cent in mid-day trade for the second day and indices remained in negative territory amid moderate turnover as investors awaited cues on next week’s budget, which is expected to pave the way for huge tax impositions. An increase in oil prices adds insult to injury, stock market analysts said.

Amid those developments both indices moved downwards. The main All Share Price Index fell approximately 2.3 per cent or 183.16 points to 8828.08 and the most liquid index slipped 2.92 per cent or 85.93 points to 2,858.57. Turnover stood at Rs 2.1 billion with two crossings. Those two crossings were reported in Windforce PLC, which crossed seven million shares to the tune of Rs 122.5 million, its shares traded at Rs 17.50 and Chevron Lubricants 450,000 shares crossed to the tune of Rs 42 million, its shares traded at Rs 93.50.

In the retail market, companies that mainly contributed to the turnover were; Expolanka Holdings Rs 244 million (1.1 million shares traded), LOLC Finance Rs 87.8 million (10.8 million shares traded), Asiya Siyaka Commodities Rs 65.6 million (14.8 million shares traded), Hayleys Rs 52.9 million (523,000 shares traded), Kotagala Plantations Rs 45.3 million (5.1 million shares traded) and Browns Investments Rs 41.8 million (5.2 million shares traded). During the day 104 million share volumes changed hands in 28000 share transactions.

It is said that high net worth and institutional investor participation was noted in JKH, Kahawatte Plantations and Horana Plantations. Mixed interest was observed in Lanka IOC, Expolanka Holdings and Kotagala Plantations, while retail interest was noted in Asia Siyaka Commodities, Browns Investments and SMB Leasing.

Food, Beverage and Tobacco sector was the top contributor to the market turnover (due to Kotagala Plantations and Kahawatte Plantations) while the sector index edged down by 0.04 per cent. The share price of Kotagala Plantations moved up by 80 cents (9.20 per cent) to close at Rs. 9.50. The share price of Kahawatte Plantations appreciated by Rs. 3.80 (10.86 per cent) to close at Rs. 38.80.

Energy sector was the second highest contributor to the market turnover (due to Lanka IOC), while the sector index edged down by 0.02 per cent. The share price of Lanka IOC closed flat at Rs. 179.50.Yesterday, the Central Bank’s US dollar buying rate was Rs 357.40 and the selling rate Rs 368.71. The Central Bank’s prudent monetary policy has stabilized the rupee depreciation to a great extent, financial sources said.