The Colombo Bourse witnessed a notable surge in optimism today, fuelled by the ceasefire agreement between Iran and Israel. The market responded positively to the news, opening on a bullish note and maintaining its upward momentum throughout the session, fully recovering the previous day's losses.
The ASPI closed at 17,191, marking a gain of 426 points, largely supported by strong retail participation. Broad-based price gains were observed across sectors, with heightened investor interest in Banking sector stocks and conglomerates.
COMB, JKH, MELS, HAYL and LOLC emerged as the top positive contributors to the index. Turnover stood elevated at LKR 5.2Bn, demonstrating over a 100.0% increase from yesterday. However, this turnover level is still lower than the monthly average of LKR 5.3Bn.
The Banking sector was the top contributor to today’s turnover, accounting for a share of 22%. This was followed by the Capital Goods and the Diversified Financials sector which produced a joint contribution of about 37%. Foreign investors turned net sellers, with a net outflow of LKR 41.3Mn.
BOND MARKET
Middle East ceasefire triggers heavy buying
Secondary market participants responded positively to the Middle East ceasefire, leading to strong buying interest across the yield curve. Additionally, market activity and trading volumes remained elevated.
Consequently, at the short end of the curve, 2028 maturities namely, 15.03.2028, 01.05.2028 and 15.12.2028 traded between 8.90% to 9.10%. The 2029 maturities, particularly 15.06.2029, 15.09.2029, and 15.12.2029, were actively traded within the range of 9.50% to 9.65%.
Moving ahead on the yield curve, 15.12.2032 was observed trading at the range of 10.47% to 10.40%. In the forex market, the LKR depreciated marginally against the greenback, closing at LKR 301.1/USD, compared to the previously seen rate of 300.4/USD. Meanwhile, overnight liquidity in the banking system expanded to LKR 110.7Bn from the previously seen low of LKR 103.0Bn.
Courtesy: First Capital Research
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