Sri Lanka’s stock market suffered a sharp sell-off following the United States’ imposition of a 44% tariff on Sri Lankan exports, as panic gripped investors and major export-oriented firms saw double-digit losses.
The All Share Price Index (ASPI) fell 2.19%, or 349.84 points, closing at 15,657.60. The S&P SL20 Index dropped 2.5% to 4,643.32, with over 123 million shares traded amid widespread selling pressure.
“Investors are in a panic after the US tariff imposition,” said Ranjan Ranatunga, Assistant Vice President of Research at First Capital. “Most of the major sectors are affected.”
Capital Alliance Holdings (CAL) identified four companies most at risk due to high exposure to the U.S. market:
• Hayleys Fabric PLC (MGT) shares plunged 12.9%. With 100% of its manufacturing based in Sri Lanka and heavy reliance on Nike and Victoria’s Secret, the firm is highly vulnerable to order relocations.
• Teejay Lanka PLC (TJL) shares fell 9.5%, though its India-based operations may provide a buffer. India is expected to strike a more favourable deal with the US, potentially reducing its own tariff rate from 26%.
• Dipped Products (DIPD), which exports gloves, saw its shares drop 7.2%. While CAL suggested a neutral impact due to limited US exposure, the company may benefit from its Thai operations.
• HayCarb PLC (HAYC) dropped 4.2%, with analysts noting that its significant manufacturing capacity in Indonesia and Thailand — both facing lower tariffs — could help mitigate losses.
The tariffs come at a particularly sensitive time. Apparel, one of Sri Lanka’s largest exports to the US, is expected to take the hardest hit. Compounding matters, other competing exporters like Bangladesh (37% tariff), India (26%), and the Philippines (17%) face significantly lower duties.
Meanwhile, currency dealers have warned that the Sri Lankan rupee could come under downward pressure. “If Sri Lanka doesn’t negotiate for a better solution, the rupee could be under depreciation pressure,” said one dealer, citing potential dollar shortages due to reduced export earnings.
The Trump administration has framed the sweeping tariffs as part of a broader economic reset. But with Sri Lanka now facing one of the highest levies globally, the shock to trade, investor confidence, and the economy may only just be beginning.
