CSE declines further as geopolitical concerns weigh on investor sentiment

By Almas Equities Research

The Colombo Stock Exchange extended its decline on Wednesday, with both benchmark indices closing lower as escalating tensions in the Middle East continued to weigh on investor confidence. The market opened on a negative note, mirroring weakness across regional equity markets, as rising global oil prices and concerns over the potential economic impact of prolonged geopolitical uncertainty triggered broad-based selling pressure.

Although the market recovered part of its early losses during the latter half of the session, investor sentiment remained cautious throughout the day. Selective buying interest was observed in several fundamentally strong counters, while the increased participation from value investors through crossing transactions highlighted continued positioning in quality stocks despite prevailing market uncertainties.

The ASPI declined by 133.80 points, or 0.61%, to close at 21,828.50, while the S&P SL20 Index fell by 35.98 points, or 0.59%, to settle at 6,099.52. Total market turnover amounted to LKR 2.25 Bn, with 210.21 Mn shares traded during the session, reflecting improved activity compared to recent sessions, mainly supported by crossing transactions.

The Capital Goods sector emerged as the largest contributor to market turnover, generating LKR 0.44 Bn with 22.21 Mn shares traded. JKH.N led activity within the sector, recording LKR 0.44 Bn in turnover on 22.21 Mn shares traded. Crossing transactions accounted for LKR 1.14 Bn, representing 50% of total market turnover, with the largest crossing recorded in COCO.N amounting to LKR 0.45 Bn involving 18.00 Mn shares.

Market breadth remained weak, with 152 decliners outweighing 47 gainers, reflecting continued selling pressure across the broader market despite the late-session recovery. RICH.N emerged as the largest positive contributor to the ASPI, adding 7.35 points, followed by ASPH.N, HNB.N, SLTL.N, and SDB.N. On the downside, SAMP.N exerted the largest drag on the index, reducing it by 9.82 points, while HAYL.N, DIAL.N, LOLC.N, and MELS.N also weighed on overall market performance.

Among notable trades, ASPH.N recorded significant activity with a turnover of LKR 0.07 Bn and 104.50 Mn shares traded. The counter gained 60.00% during the session, emerging as one of the strongest performers of the day. Overall, the market remained under pressure as investors continued to monitor global geopolitical developments and await clearer signals on economic conditions and corporate earnings prospects before increasing market exposure.