Sri Lanka shares plunge 2.2-pct

Jan 24, 2012 (LBO) – Sri Lankan shares plunged again Tuesday, following Monday’s fall, amid panic selling, although recovering somewhat towards the end of trading, brokers said. Newly listed Asia Asset Finance was another heavily traded stock, closing at 6.10 rupees, up 20 cents.

“The Colombo stock market continued to end with negative returns with panic selling and margin calls driving the indices lower,” Lanka Securities said in a report.

“Heavy retail activity was seen in Environmental Resources, Asia Assets Finance and HVA Foods.”

“The Colombo bourse dipped further chiefly due to panic selling from retail investors,” SC Securities said.

Analysts said among the stocks which fell steeply were those which were driven up earlier by on speculative trading which were not backed by fundamentals.

The main All Share Price Index closed down 2.24 percent (127 points) at 5,536.09, while the more liquid Milanka index fell 2.10 percent (100.81 points) to close at 4,710.90.

The main index actually fell below 5,500 to 5,455 in intra-day trade and recovered while the MPI fell to 4,650 levels and recovered.

The market is now down 4.5 percent since the regulator on January 16 agreed to demands from stock brokers to lend more money to clients to buy stocks and prop up the market.

Turnover Tuesday was 1.28 billion rupees, according to stock exchange provisional figures.

Index heavyweight John Keells Holdings closed at 160 rupees, down four with 1.15 million shares done. JKH was the top contributor to the market turnover.

Swarnamahal Financial Services was the most actively traded stock, closing at 113.90 rupees, up 14.30 with 1.38 million shares traded.

Environmental Resources Investments was also heavily traded and closed at 27 rupees, down 1.40.