Sri Lanka stocks down for 3rd straight session on dull sentiment

ECONOMYNEXT – Sri Lanka stocks fell on Tuesday (26) for the third session with the overall market remained dull as investors shrugged off government’s moves to stabilize the economy, brokers said.

The main All Share Price Index (ASPI) edged down 0.12% or 9.25 points down at 7,630.17.

“The market is moving downward on the same dull sentiments on risky assets as investors have taken a wait-and-see approach. However, the market is witnessing some profit taking too,” a broker said.

There’s also margin selling in the market with a low supply of buyers, he said.

President Wickremesinghe appointed former minister Dinesh Gunawardene as the Prime Minister of the crisis-hit island nation that has plunged into a political crisis and reappointed the same cabinet he had before the parliament vote. The only exception was the foreign minister.

The more liquid S&P SL20 index also fell, closing at 0.64% or 15.56 points lower at 2,418.71.

Sri Lanka is facing its worst fuel crisis in its post-independent era and the economy is expected to contract between 8-10% this year.

Foreigners sold a net of 20.9 million rupees. However, the total foreign outflow so far this year is 696 million rupees.

The turnover was 693 million rupees, less than a quarter of this year’s average daily turnover of 3.09 billion rupees.

The main ASPI has gained 3.9% in July so far after falling 9.3% in June, reversing a 6% gain in May. It lost 23% in April followed by a 14.5% fall in March.

The market has lost 37.5% so far this year after being one of the world’s best stock markets with an 80% return last year when large volumes of money were printed.

Sri Lanka’s sovereign debt default on April 12 has already led the country to be rated with restricted/selective default rating by rating agencies, which has weighed on investor sentiment.

Investors are also concerned over the steep fall of the rupee from 203 to 370 levels so far in 2022.

Commercial Bank, leading the ASPI’s fall, closed 1.7% down at 52.1 rupees a share.

Expolanka fell 1.6% to 170.3 rupees a share, while Chevron Lubricants Lanka closed 3.1% down at 77.40 rupees a share. (Colombo/July 26/2022)

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