Stock market indices record 3% loss amid spike in COVID-19 positive cases

• Passing of 20A on Thursday fails to lift investor spirits
• Average turnover for the week was Rs.2.4bn
• Analysts expect lackluster sentiment to continue this week

Both indices at the Colombo Stock Exchange (CSE) lost 3 percent each during last week after a positive run with the discovery of higher number of COVID-19 positive cases throughout the country, though the government maintaining that there is no community level spread.

As of yesterday, COVID-19 positive cases topped 7, 500 mark, and for the first time, the number of COVID-19 patients in hospitals exceeded the number of patients who got discharged from hospitals.

During last week, the benchmark All Share Price Index (ASPI) fell 2.97 percent or lost 176.85 points while the more liquid S&P SL20 Index fell 3.06 percent or lost 72.55 points.
ASPI has lost 5.88 percent year-to-date,.

The average market turnover for last week was Rs.2.4 billion.

Despite the popularly held belief at the beginning of the week that the passing of the 20th Amendment in Parliament, which solidified the government’s 2/3 majority, would boost the market and send the ASPI over the 6, 000 point mark, the development appeared to have failed to make an impression on local investors.

Market analysts expect investor sentiment to remain lackluster during this week due to the escalation of COVID-19 positive cases and the quarantine curfew imposed on several parts of the country to contain the virus spread.

Local investor appetite in the market remains high largely due to extremely low interest rates in the economy.

Market sources said a number of motor vehicle dealers and importers have entered the CSE afresh following the government completely banning the importation of motor vehicles since April to preserve the country’s foreign exchange. 

Foreigners have been on the selling side since the beginning of the year and net foreign sales so far this year has topped Rs.42 billion.