The Colombo Bourse traded largely sideways during the first half of the session before coming under sustained selling pressure in the second half, extending the cautious sentiment seen over the past few sessions.

Elevated global oil prices and continued uncertainty surrounding the Middle East remained key concerns, encouraging investors to maintain a wait-and-see approach and limited buying activity.

The ASPI fell 69 points to close at 21,314, while the S&P SL20 declined by 8 points to close at 5,994. Top negative contributors to the ASPI were CINS, BREW, DIAL, SPEN and JKH. Turnover remained low, with retail participation subdued, while HNW and retail investors contributed almost equally to overall turnover.

HNW activity was concentrated mainly in blue-chip counters. Daily turnover stood at LKR 1.5Bn, marking a decrease of 36.5% over the monthly average of LKR 2.4Bn. Capital Goods sector led the daily turnover with a share of 31%, followed by the Banking, and Energy sectors collectively contributing 34%. Foreign investors remained net sellers, posting a net outflow of LKR 94.7Mn.

BOND MARKET

Short-to-belly end of the yield curve nudges up, while the long end remains steady

Stemming from the cautious investor sentiment due to geopolitical escalations, short-to-belly end of the yield curve saw some upward movement by approximately 10-20bps.

However, the long end of the yield curve held broadly unchanged. Meanwhile, the trading volumes were high in the secondary market. Over the short end, 15.03.2028 traded at 10.10%, while 01.09.2028, 15.10.2028 and 15.12.2028 traded within the range of 10.25%-10.40%.

At 2029 segment, both 15.09.2029 and 15.12.2029 maturities changed hands at 10.70%. Moving ahead, 15.05.2030 and 01.07.2030 traded at 10.90% and 10.95% respectively, while 01.08.2030 saw trading between 10.95%-11.10% and 15.10.2030 was dealt between 11.05%-11.20%.

Furthermore, 01.12.2031 traded between 11.52%-11.60% and 01.11.2033 bond was quoted at 11.85%. Towards the belly end, 15.06.2034, 15.09.2034 and 15.10.2034 traded within the range of 11.96%-12.00%. Finally, 15.08.2036 bond traded at 12.00%On the external front, the LKR depreciated against the USD, standing at LKR 328.68/USD, compared to LKR 328.60/USD seen earlier. Market liquidity in the banking system expanded to LKR 381.40Bn compared to LKR 366.11Bn recorded previously.

-First Capital Research-