Sri Lanka stocks ended sharply lower on Monday as persistent selling pressure on Colombo Dockyard shares weighed heavily on market sentiment. Thin holiday-season trading and cautious retail participation further amplified the downturn across key indices.
Sri Lanka stocks slide as Colombo Dockyard weakness weighs on market
Sri Lanka stocks declined notably on Monday, extending recent weakness at the Colombo Stock Exchange (CSE) as continued losses in Colombo Dockyard shares dragged broader market performance. Brokers said subdued investor confidence and low seasonal activity combined to push the market decisively into negative territory.
The benchmark All Share Price Index (ASPI) closed the session at 21,898.20, shedding 250.89 points, or 1.13 percent, compared to Friday’s close. Market participants noted that although the decline appeared broad-based, the steep fall in Dockyard shares played a disproportionate role in pulling the index lower.
“Market was about 250 points down, mostly on Dockyard shares,” said Ranjan Ranatunga, Assistant Vice President – Research at First Capital, highlighting how the stock’s continued downtrend dominated trading sentiment throughout the session.
The more liquid S&P SL20 index also ended in negative territory, closing 42.18 points lower, or down 0.70 percent, at 6,014.36. Both indices experienced a gradual decline over the course of the day, with selling pressure building steadily rather than occurring in sharp intraday swings. Analysts attributed this pattern to cautious retail investors adjusting positions amid thin volumes.
Activity levels remained muted, reflecting the impact of the holiday season on trading participation. According to market analysts, retail investors drove most of the activity, while institutional participation remained limited. This lack of depth in the market amplified price movements, particularly in stocks already under pressure.
Colombo Dockyard emerged as the single largest drag on the ASPI, with the share price falling 35.50 rupees to close at 107.00 rupees. Other heavyweight counters also contributed to the decline. Hatton National Bank fell 4.25 rupees to 385.25 rupees, while Richard Pieris & Company dropped 1.20 rupees to 38.60 rupees. Cargills (Ceylon) declined by 19.50 rupees to 761.25 rupees, and John Keells Holdings edged down by 20 cents to close at 20.90 rupees.
Despite the overall weakness, crossings were recorded in John Keells, National Trust Bank, and Tokyo Cement, indicating selective interest in fundamentally strong counters even as broader sentiment remained cautious. Market turnover for the session stood at 2.7 billion rupees, below the monthly average of approximately 3.7 billion rupees, reinforcing the view that trading activity was subdued.
Foreign investor activity, however, provided a modest positive signal. The market recorded a net foreign inflow of 8.57 million rupees during the session. Colombo Dockyard’s voting share (DOCK.R) attracted a foreign inflow of 27.1 million rupees, suggesting that some overseas investors may be selectively accumulating the stock despite its recent decline.
Total share volume reached 81.9 million shares, with 26,499 trades executed during the day. Market participants noted that while volumes were not particularly weak by seasonal standards, they lacked the conviction typically seen during trend reversals.
Beyond Sri Lanka, equity markets across the region traded on a mixed note. In India, financial and information technology stocks led gains, as improving currency stability encouraged foreign investors to return to domestic equities. Reuters reported that India’s rupee rebound has helped restore confidence among overseas funds.
India’s Nifty 50 index was trading 0.79 percent higher at 26,172.40, while the Sensex gained 0.75 percent to reach 85,567.48. Meanwhile, Japan’s Nikkei 225 index surged 1.81 percent to close at 50,402.39, buoyed by strong momentum in artificial intelligence-related shares, according to Japan’s Mainichi newspaper.
Other Asian markets showed more subdued performance. Pakistan’s Karachi Stock Exchange 100 index dipped 0.16 percent to 171,138.69, while Hong Kong’s Hang Seng index ended 0.43 percent lower at 25,801.77. In contrast, Singapore’s Straits Times Index outperformed, rising 0.89 percent, or 40.51 points, to close at 4,610.29.
In commodities, gold prices strengthened, offering a potential hedge amid equity market volatility. As of 3.45 p.m. Sri Lankan time, spot gold was trading at 4,416.78 US dollars, up 1.37 percent for the day.
Market analysts said near-term performance of Sri Lanka stocks is likely to remain sensitive to developments surrounding Colombo Dockyard and broader investor sentiment during the holiday-thinned trading environment. A sustained recovery, they noted, may depend on renewed institutional participation and clearer signals on corporate fundamentals in the weeks ahead.