Ongoing geopolitical tensions in the Middle East weighed on market performance, exerting downward pressure on both indices despite a brief uptick observed during early trading hours.

The initial gains were not sustained, as the market reversed in the evening session, resulting in the ASPI declining by 94 points to close at 21,032, while the S&P SL20 index fell by 29 points to settle at 5,833.

The key negative contributors to the ASPI included NDB, CINS, CARG, MELS, and JKH. Market participation remained dull throughout the session, with participation from both retail and HNW investors staying relatively subdued, reflecting a cautious stance amid prevailing uncertainties.

Daily turnover stood at LKR 1.9Bn, marking a decrease of 55.1% over the monthly average of LKR 4.2Bn. Banking sector led the daily turnover with a share of 49%, followed by the Materials, and Capital Goods sectors collectively contributing 22%. Foreign investors remained net sellers, posting a net outflow of LKR 294.1Mn

BOND MARKET

Selling pressure nudges the yield curve slightly upward

The secondary market saw a degree of selling pressure today, leading to a slight upward shift in the overall yield curve. However, market activity remained subdued, with extremely low trading volumes.

Among the maturities traded, the 01.07.2028 bond moved within a tight range of 9.75% to 9.80%. Further along the curve, the 01.06.2033 bond was traded at 11.00%.

On the external front, the LKR depreciated against the USD, closing at LKR 315.45/USD compared to LKR 315.38/USD recorded previously. Liquidity in the banking system contracted to LKR 225.43Bn from LKR 231.84Bn recorded previously.

-First Capital Research-