Sri Lanka stocks fall sharply

Mar 14, 2011(LBO) – Sri Lankan stocks fell sharply Monday, extending losses from the previous week with forced selling by retail investors sending the market down across-the-board, brokers said.

The All Share Price Index closed at 7,169.76, down 1.96 percent (143.26 points) while the Milanka Price Index of more liquid stocks closed at 6,718.07, down 1.53 percent (104.09 points), according to stock exchange provisional figures.

Turnover was 945 million rupees. There were 192 losers and 22 gainers.

“Forced selling was seen in trading with the credit issue being one of the main reasons and some banks making margin calls as well,” an analyst said.

In November 2010, the Securities Exchange Commission said it has extended a December deadline to cut credit given by brokers to their clients by six months to June 2011, with half the credit to be cut down by March 2011.

“Market trading was mainly driven by retail investors,” Vajirapani Bandaranayake of Bartleet Mallory Stockbrokers said.

Richard Pieris closed at 13.80, down 0.20 cents with over 3.4 million shares traded. There was an off-the-floor crossing of 1.4 million shares done at 14.50 rupees.

“We believe the shares were purchased by the state sector,” an analyst said.

Piramal Glass closed at 11.00, down 0.50 cents with 5.9 million shares changing hands.