CSE extends decline as middle east concerns weigh on investor confidence

By Almas Equities Research

The Colombo Stock Exchange (CSE) extended its losses on Thursday, with both benchmark indices closing lower as escalating tensions in the Middle East continued to dampen investor sentiment. Persistent geopolitical uncertainty and concerns over its potential economic implications kept investors on the sidelines, resulting in subdued trading activity and broad-based selling pressure across the market.

Market participation remained relatively weak throughout the session, with lower turnover and share volume levels reflecting cautious investor behavior. While retail activity appeared muted, the notable contribution from crossing transactions indicated continued accumulation by long-term investors in selected fundamentally strong counters despite prevailing market volatility.

The All Share Price Index (ASPI) declined by 191.45 points, or 0.89%, to close at 21,270.02, while the S&P SL20 Index fell by 50.14 points, or 0.84%, to settle at 5,935.28.

Total market turnover amounted to LKR 1.66 billion, with 86.38 million shares changing hands during the session. The Capital Goods sector emerged as the largest contributor to turnover, generating LKR 0.44 billion from 18.82 million shares traded. JKH.N led sector activity, accounting for LKR 0.29 billion in turnover with 14.88 million shares traded.

Crossing transactions contributed LKR 0.48 billion, representing 28% of total market turnover. The largest crossing was recorded in JKH.N, amounting to LKR 0.28 billion involving 12.00 million shares, highlighting continued strategic investor participation despite the broader market weakness.

Market breadth deteriorated significantly, with only 29 gainers against 177 decliners, underscoring the extent of selling pressure across the market.

Among the positive contributors, GREG.N led gains with a contribution of 6.16 points, followed by MELS.N, ASPH.N, CLND.N, and ABL.N. On the downside, DFCC.N emerged as the largest drag on the index, shedding 9.26 points, while COMB.N, DIAL.N, NDB.N, and HNB.N also weighed heavily on market performance.

Among notable trades, HNBF.R recorded substantial activity with a turnover of LKR 0.05 billion and 17.24 million shares traded. The counter, however, closed 6.06% lower, reflecting the broader risk-off sentiment that dominated the session.