ECONOMYNEXT – Quickly after the USA and Israel began bombing Iran on February 28, Sri Lanka’s booming inventory market took a success.
The bourse has plunged 12.7 % to this point by March 20, erasing 1.07 trillion rupee price capital in simply 14 days.
It plunged over 5 % with a short lived buying and selling halt when it opened for buying and selling for the primary time on March 3 after the assault.
The market has been ready for some excellent news from each native and exterior fronts.
Regionally, the return of gasoline queues and doable energy disaster threatens investor sentiment, whereas uncertainty over cessation of the battle weighs from the exterior entrance, analysts say.
“Curiously, in comparison with different markets like India, Europe and so forth, Sri Lanka’s market has reacted probably the most,” Raynal Wickremeratne, Head of Technique at Softlogic Stockbrokers instructed EconomyNext.
“Most nations confronted a 4-7 % drop, whereas we’re down virtually 14 %. This might be because of components like buyers seeing gasoline queues exterior as quickly as they go away their workplaces.”
Gasoline Queues Return
Instantly after the assault, Sri Lanka witnessed lengthy queues throughout the nation as most believed there might be a scarcity, even earlier than Iran closed the Strait of Hormuz.
Sri Lanka’s expertise of a three-decade battle and 2022 financial disaster led some motorists to remain in queues, to not fill their tanks, however to gather and retailer further gasoline.
Analysts say buyers are nervous as a result of Sri Lanka’s expertise of 2022 energy cuts, cooking fuel queues, and closure of public establishments adopted by such queues with an final results of financial slowdown.
A slowdown coupled with closure of transit hubs like Dubai and Doha imply Sri Lanka’s booming tourism trade might be at a danger of receiving decrease variety of arrivals.
Sri Lanka is in its peak tourism season and had been concentrating on 3 million vacationers for the entire 12 months.
However arrivals have fallen 19.4 % within the first 18 days of March, official knowledge confirmed.
Every day common vacationer arrivals plunged 39 % in March to six,000 from roughly 10,000 in February 2026.
This drop was mirrored on listed tourism shares; between February 27 and March 17, Ceylon Motels Corp fell 29.7 %, Palm Backyard Lodge dropped 24.7 %, and Aitken Spence Lodge Holdings declined 23.8 %, Softlogic Stockbroker experiences confirmed.
Market heavyweight John Keells Holdings dropped 3.74 % by March 17, which analysts attributed to its tourism sector.
Softlogic Stockbrokers in its report stated Jetwing Resorts reported an occupancy decline of 5–10 %, whereas Heritance Ahungalla recorded notable cancellations in long-stay European bookings.
“For the three million plus arrival goal to be met, the trade should pivot towards direct Asian connectivity and transfer away from its historic “hub-and-spoke” reliance on the Center East,” Navin Ratnayake, Head of Analysis at John Keells Stockbrokers, instructed Economynext.
“Sri Lanka is caught between funds, mass market locations like Vietnam and Thailand, and luxurious locations like Maldives. This “center positioning” is strategically susceptible.”
Exhausting Hit on Tea
Together with tourism, Sri Lanka’s exports led by tea has been hit exhausting by the continued battle within the Gulf area.
Gulf nations are the highest consumers of Sri Lanka’s branded ‘Ceylon Tea’, with Iraq main the best way with 23.3 %, as per 2025 knowledge.
In Sri Lanka’s weekly tea public sale, the value fell 4.3 % and the amount declined 13.2 % within the first week after the assault.
That additionally led some tea shares to fall as a lot as 30 % after the assault, amid unaffordable delivery prices, main many exporters to face delays in delivering their orders on time.
The Tea Exporters Affiliation (TEA) estimates a weekly income lack of US$10-15 million.
Consequently, tea shares in listed corporations have fallen.
Namunukula Plantations plunged 30.6 %, between February 27 and March 17 whereas Agalawatte Plantations fell 22 %.
Business leaders like Akbar Brothers indicated that whereas they will nonetheless purchase and course of tea, however they’re unable to ship it, resulting in warehouses being occupied with packed cargo.
“Sure ships don’t berth right here… there’s a complete blockage,” an official from Akbar Brothers acknowledged, noting that freight costs have spiked considerably.
This significantly impacts the high-value low-grown tea (kahata) favoured by Center Jap and Russian markets.
With exporters changing into much less lively within the public sale because of cargo delays, there are considerations concerning the sustainability of premium tea costs.
Textiles Plunge
Within the attire sector, listed corporations like TJL are rerouting shipments to Europe and the US by way of the Cape of Good Hope, avoiding the Pink Sea, in accordance with Softlogic stockbrokers.
The shares in TJL plummeted 20.6 % on the primary day of buying and selling after the Iran bombing by the U.S. and Israel.
Whereas consumers presently bear the extra freight prices, corporations face incremental prices for uncooked supplies like yarn and material imported from China and India.
Hayleys PLC, which has important logistics and export pursuits, noticed its share value falling 6.4 % on the primary day of buying and selling after the battle erupted within the Center East.
Hayleys Materials shares, a garment exporter and subsidiary of Hayleys PLC, have fallen 17.2 % for the reason that Center East battle.
Ports, Bunkering Shares Acquire
Analysts say South Asia Gateway Terminals (SAGT) and West Container Terminal (WCT) within the Colombo Port may see elevated throughput as cargo initially destined for the Center East is rerouted or offloaded in Colombo.
The highest conglomerate John Keells Holdings (JKH) has stakes in each terminals.
Analysts stated JKH shares have been resilient because of expectations of its terminal and bunkering companies doing higher.
Bunkering operations are additionally seeing short-term beneficial properties. As Brent crude rose to $109.2 per barrel as of 1633 hours on March 20, a 49.62 % improve for the reason that battle started, operators can promote current stock at improved margins, experiences confirmed.
JKH’s bunkering enterprise, which operates on a cost-plus foundation, is especially well-insulated, in accordance with specialists.
As a conglomerate concerned in a number of sectors which are struggling because of the battle, its bunkering operations may probably defend the corporate from the losses made within the tourism sector.
Within the agribusiness sector, Sunshine Holdings PLC is benefiting from increased international palm oil costs, which have risen 12 % for the reason that begin of the battle, which offsets a few of the losses made of their tea commerce by Watawala Tea and Zesta, Softlogic Stockbrokers stated in its report.
Equally, the renewable power sector is changing into comparatively extra engaging as the price of thermal electrical energy era rises alongside international oil costs, it stated. (Colombo/March20/2026)
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