The Colombo Stock Exchange (CSE) closed lower Wednesday (30) as investors locked in profits, particularly in the banking sector, amid muted market sentiment.

The benchmark All Share Price Index (ASPI) fell 0.42% (-67.40 points) to 15,799.94, while the blue-chip S&P SL20 dropped 0.59% (-27.60 points) to 4,643.66- its steepest single-day decline this week.

Financial stocks were the primary drag on Wednesday’s market performance, with sector leaders posting significant losses.

Hatton National Bank slid 2.1%, while Sampath Bank dropped 1.8% and Commercial Bank declined 1.5%.

Together, these banking stocks accounted for over 40% of the ASPI’s downward movement, reflecting investor caution ahead of the upcoming quarterly earnings season.

The market saw sustained foreign selling pressure, with net outflows reaching Rs. 90.58 million. This extends a concerning trend of offshore investor withdrawals observed throughout the trading week.

Market analysts attribute this to ongoing currency volatility and global risk aversion affecting emerging markets.

Despite the broader market decline, trading activity stayed robust with a total turnover of Rs. 2.37 billion. Retail investors were particularly active in mid-cap stocks, with 124.7 million shares changing hands.

The continued domestic participation suggests local investors may be viewing the pullback as a buying opportunity in select sectors.

In a contrasting trend, consumer staples showed resilience against the market downturn. Melstacorp gained 1.9% and Cargills advanced 1.6% as investors rotated into defensive plays. The materials sector also saw notable strength, with PGP Glass Ceylon jumping 3.2% and Distilleries Company rising 2.4%, buoyed by improving export prospects and favourable commodity pricing.