The Colombo Bourse experienced volatility during the first half of trading before facing a significant downward movement in the second half as selling pressure intensified, pushing the market into negative territory by the close.

The ASPI fell 68 points to close at 20,813, while the S&P SL20 declined by 18 points to close at 5,884. Retail investor participation remained low, while HNW participation was relatively high and contributed significantly to market activity.

SING was among the most actively traded counters, contributing substantially to the day’s turnover. Turnover remained below average failing to cross the LKR 1.0Bn mark, reflecting subdued overall market activity.

Daily turnover stood at LKR 0.9Bn, marking a decrease of 41.1% over the monthly average of LKR 1.5Bn. Banking sector led the daily turnover with a share of 28%, followed by the Real Estate Management & Development, and Diversified Financials sectors collectively contributing 31%. Foreign investors remained net sellers, posting a net outflow of LKR 140.2Mn.

BOND MARKET

Yield curve holds steady as market activity stays muted

The secondary market reflected a quiet trading day with limited activity, while the yield curve stood broadly unchanged. Over the 2030 segment, both 01.08.2030 and 15.10.2030 maturities traded between 11.15%-11.20%.

Moving ahead, 01.02.2031 and 15.12.2032 changed hands at 11.25% and 11.70% respectively. Finally, at the belly-end, 15.10.2034 bond traded at 12.00%.

On the external front, the LKR appreciated against the USD, standing at LKR 330.62/USD, compared to LKR 330.70/USD seen earlier. LKR appreciated against other major currencies such as GBP, EUR, CNY and AUD, while marginally depreciated against JPY.

Market liquidity in the banking system expanded to LKR 360.11Bn compared to LKR 355.13Bn recorded previously.

-First Capital Research-