The Colombo Bourse experienced a notably subdued session today, with very limited market activity and a small number of crossings accounting for a significant portion of turnover.

The ASPI fell 77 points to close at 20,979, while the S&P SL20 declined by 19 points to close at 5,909. Top negative contributors to the ASPI were BREW, MELS, CTHR, CINS and HNB.

HNW participation remained low, while retail participation remained exceptionally low, reflecting a broad lack of investor engagement.

Turnover failed to cross the LKR 1.0Bn mark and reach the lowest level in around six weeks. Increasing concerns surrounding the situation in the Middle East kept investors cautious, with many adopting a wait-and-see approach amid continued uncertainty.

Daily turnover stood at LKR 750.3Mn, marking a decrease of 69.0% over the monthly average of LKR 2.4Bn. Capital Goods sector led the daily turnover with a share of 21%, followed by the Food Beverage & Tobacco, and Diversified Financials sectors collectively contributing 28%. Foreign investors turned net buyers, posting a net inflow of LKR 19.1Mn.

BOND MARKET

Short and mid tenor yields ease amid selective buying

Buying interest continued to dominate market sentiment. However, buying activity was concentrated mainly in the short- to medium-term tenors, resulting in a downward adjustment in yields across shorter maturities, extending up to the 2033 maturity.

Conversely, the belly end of the curve, particularly the 2034 and 2035 maturities, witnessed modest selling interest. Nevertheless, yields in this segment remained largely stable. Both investor participation and market volumes appeared moderate today.

At the short end of the curve, 15.12.2028 traded at 10.70%, while 01.08.2030 and 15.10.2030 were both seen changing hands from 11.25% to 11.15%.

Further along the curve, 01.02.2031 traded between 11.35% to 11.25% and 01.10.2032 and 15.12.2032 both traded within 11.55%-11.45%. At the belly of the curve, 15.01.2033 and 01.11.2033 traded between 11.80% to 11.65%.

Finally, at the belly end of the curve, 15.06.2034 traded at 12.00% and 15.06.2035 traded higher at 12.10%. On the external front, the LKR appreciated against the USD, standing at LKR 330.35/USD, compared to LKR 332.13/USD seen earlier. Market liquidity in the banking system marginally expanded marginally to LKR 325.72Bn compared to LKR 324.79Bn recorded previously.

-First Capital Research-