The Colombo Bourse remained relatively stable, recording a gain of +100 points during the morning session, supported by CBSL's decision to maintain the OPR at 8.75% at yesterday’s policy meeting.

However, selling pressure emerged in the second half of trading, resulting in a marginal decline by the close. The session was characterized by mixed investor sentiment, with the market registering only a modest dip amid late selling pressure.

The ASPI fell 5 points to close at 20,813, while the S&P SL20 declined by 2 points to close at 5,894. Turnover picked up from the subdued levels seen over the past two sessions, with HNW investors carrying a significant share of market activity despite both HNW and retail participation remaining low.

Trading activity was largely concentrated in AEL, which contributed significantly to the day’s turnover. Daily turnover stood at LKR 1.6Bn, marking an increase of 4.0% over the monthly average of LKR 1.5Bn.

Capital Goods sector led the daily turnover with a share of 36%, followed by the Banking, and Diversified Financials sectors collectively contributing 26%. Foreign investors turned net sellers, posting a net outflow of LKR 67.4Mn.

BOND MARKET

CBSL holds OPR unchanged at 8.75%

Today, the Central Bank of Sri Lanka (CBSL) announced its decision to maintain the Overnight Policy Rate (OPR) at 8.75%. The decision reflects the impact of the proactive monetary policy tightening implemented in May 2026, alongside other measures whose effects have largely materialised.

The CBSL also considered heightened uncertainty arising from geopolitical tensions in the Middle East and potential economic risks associated with El Niño conditions.

The secondary market initially witnessed buying interest, which later shifted towards selling amid profit-taking activity. Against this backdrop, market activity remained moderate, with the yield curve edging slightly lower compared to yesterday.

Among the trades recorded today, at the short end, the 01.08.2030 traded between 11.00% to 11.15%, while the 15.10.2030 traded between 11.05% to 11.20%. Within the 2031 segment, the 01.02.2031 traded between 11.10% to 11.15%, while the 01.12.2031 traded at 11.45%.

Meanwhile, the 15.12.2032 traded between 11.60% to 11.75%. In the 2033 segment, the 15.01.2033 traded at 11.75%, while the 01.11.2033 traded at 11.85%. Finally, within the 2034 segment, the 15.06.2034, 15.09.2034 and 15.10.2034 traded within the range of 11.90% to 12.00%. Today, the PDMO concluded its weekly T-Bill auction, raising LKR 80.0Bn, in line with the total amount offered. For the 3M T-Bill, LKR 35.0Bn was initially offered, while LKR 41.9Bn was accepted.

The weighted average yield rate (WAYR) increased by 5bps to 9.25%. For the 6M T-Bill, the PDMO accepted LKR 28.9Bn against an offered amount of LKR 25.0Bn, with the WAYR rising by 4bps to 9.41%. For the 12M T-Bill, LKR 9.2Bn was accepted, which was below the offered amount, while the WAYR increased by 2bps to 9.95%.

On the external front, the LKR depreciated marginally against the USD, standing at LKR 330.83/USD, compared to LKR 330.79/USD seen earlier. Market liquidity in the banking system contracted to LKR 338.66Bn compared to LKR 369.35Bn recorded previously. CCPI based headline inflation for Sep-26 stood at 8.0%YoY, unchanged from the previous month.

-First Capital Research