Colombo stocks fall: Banks on the firing line

Sri Lanka stocks dropped 0.28 percent following the announcement of the 90-day pause of the US “Liberation day” tariffs, brokers said, and ahead of the long holiday.

“There is uncertainty in the market because of the 90-day pause,” Dimantha Mathew, Chief Research and Strategy Officer at First Capital Holdings PLC said.

“Volumes are slightly declining.”

“We (Sri Lanka) don’t have a choice but to come up with a better agreement,” Mathew said.

“We need to come on par with the region – at least 30 percent instead of the 44 percent. If we land closer to our regional competitors, the market will be largely okay.”

The broader ASPI closed down 0.28 percent on Friday, or 42.19 points down, at 15,538.64. The market briefly reversed some losses over the session. However, the selling pressure remained.

The more liquid S&P SL20 closed down 0.52 percent, or 26.00 points at 4,617.63.

Turnover was 1.5 billion rupees.

Banks were on the firing line.

HNB traded 0.5 percent down at 300.00 rupees, DFCC Bank ended 1.2 percent weaker at 104.50 rupees, Sampath Bank closed 1.3 percent down at 111.25 rupees, and National Development Bank closed 1.9 percent lower at 104.25 rupees.

Top negative contributors to the ASPI were Sampath Bank, NDB, Malwatte Valley Plantations (ended 11.4 percent down at 52.10 rupees), DFCC Bank, and Hayleys (closed 1.1 percent at 134.50 rupees).

“Construction sector counters are largely stable compared to others,” Mathew said.

Chevron Lubricants closed 0.72 percent up at 140.00 rupees, CIC Holdings traded 0.21 percent up at 117.50 rupees, and Alumex ended 1.3 percent stronger at 15.20.

Brokers said Sri Lanka’s risky asset market will likely follow global trends.