Bourse closed in the green zone at 10,194 and managed to notch a gain of over 18 points amidst a volatile trading session today. The market witnessed selling pressure backed with a profit-taking stance during the morning hours and got reactivated with buying interest during the latter part of the session mainly led by the mid cap Diversified counters.

Retail investor participation was visible on treasury shares after CBSL decided to reduce the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank by 200bps to 11.00% and 12.00%, respectively.

Meanwhile, market turnover recorded at USD 3.2Bn, 63.8% more than the monthly average turnover of LKR 2.0Bn, aided by multiple crossings including JKH, RCL and SUN. Notably, CIC witnessed a stake change of c.2.1% through off-board transactions, totaling 6.1Mn shares at LKR 66.00.

The Capital Goods sector and the Materials sector jointly contributed 46% to the turnover. Furthermore, foreign buying continued for the 10th consecutive day, recording a YTD net foreign inflow of LKR 2.2Bn.

Profit taking drives up yields in the secondary market

The secondary bond market witnessed mixed activities and moderate levels of investor activity after the Monetary Board of the Central Bank decided to further reduce the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank by 200bps to 11.00% and 12.00%, respectively.

With this move, the Central Bank has reduced policy rates by a total of 450bps. During the morning hours of trading 2027 maturity traded at 13.50%, yet with profit taking during mid-session, the yields on the maturity increased and traded at 14.75%.

Moreover, profit taking was also visible on the 15.05.26 maturity, which traded at an intra-day high of 15.03% whilst the 15.09.27 and 15.01.28 maturities witnessed trades at an intra-day high yield of 14.75% and 14.00%, respectively.

Courtesy: First Capital Research