Market dips amidst continued selling pressure, ending in the red

• 18 Mar 2025
• 0

The bourse faced a notable decline today, with the ASPI dropping by 255 points to close at 15,394, reflecting a 1.6% decrease. The negative contributors to the index included CINS, COMB, HNB, NDB, and JKH. Compared to yesterday's performance, the market's decline suggests that the selling sentiment has persisted, possibly due to margin calls.

High participation from retail investors contrasted with a relatively low presence of HNW investors was observed, with the market continuing to be pressured by sell-offs in the Banking and blue-chip stocks. Turnover was recorded at LKR 1.8Bn, significantly lower than the monthly average of LKR 2.7Bn, indicating subdued market activity.

The Banking sector was the most significant contributor to the overall turnover with a 24% share, followed by the Capital goods, and Food, Beverage & Tobacco sectors jointly accounting for 41%. Foreign investors turned net sellers, with a net outflow of LKR 50.5Mn.

Buying sentiment holds firm, yields retreat

Today the market saw a continuation of yesterday's sentiment, with the buying stance ascending to prominence. The yield curve demonstrated a further downward adjustment, particularly across the mid and long tenors ahead of the impending weekly T-Bill auction scheduled for tomorrow. 2028, 2029, 2030 and 2031 secured predominant market interest. Consequently, 15.02.2028, 15.03.2028, 01.05.2028 and 01.07.2028 traded within the range of 9.75% to 9.85% while 01.10.2028 and 15.12.2028 transacted at 9.92% and 9.90% respectively.

Meanwhile 15.06.2029 traded at 10.15% followed by 15.09.2029 and 15.12.2029 both of which traded at 10.16%. The two 2030 maturities; 15.05.2030 and 15.10.2030 traded at 10.25%. Moving ahead of the yield curve, 15.03.2031 and 01.12.2031 traded at the respective rates of 10.62% and 10.65%.

Finally, the 15.12.2032 maturity traded at a rate of 10.90% followed by the 01.06.2033 maturity which traded at 11.10%. On the external front, the LKR depreciated further against the USD, closing at LKR 296.3/USD compared to LKR 295.8/USD registered the previous day. CBSL holdings of government securities remained stagnant at LKR 2,511.9Bn. Overnight liquidity of the Banking system expanded to LKR 194.2Bn from LKR 181.7Bn seen in the previous day.

Courtesy: First Capital Research

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