ASPI hits a record high on banking sector strength and robust investor sentiment

• 03 Jun 2025
• 0

The Colombo Stock Exchange continued its upward trajectory, with the ASPI advancing 235 points to close at a record high of 17,214. The market opened on a strong note and maintained its momentum throughout the session, ending solidly in positive territory.

For the second consecutive day, gains were primarily driven by leading Banking sector stocks COMB, SAMP, DFCC, and HNB, with additional support from CFIN. Investor sentiment remained broadly positive, driven by heightened retail participation and increased interest from HNW investors in HNB and SEYB.

Market turnover surged to LKR 7.4Bn, a 72% increase over the monthly average of LKR 4.3Bn. The Banking sector led turnover contributions at 26%, followed by the Capital Goods and Diversified Financials sectors, which together accounted for 34%. Despite the positive domestic sentiment, foreign investors remained cautious, registering a net outflow of LKR 273.6Mn for the session.

Bond Market

Short-tenor appetite sparks mixed swings

Building on the mixed sentiment from the previous day, market participants continued to adopt a mixed stance, with investor interest largely centered around short to mid-tenor maturities.

Overall market activity remained mixed, resulting in moderate trading volumes. Amongst the traded maturities, on the short end of the curve, 01.05.2027 and 15.09.2027 traded within the 8.50% to 8.73% range.

In terms of 2028 maturities, 15.02.2028, 15.03.2028, 01.07.2028 and 01.10.2028 changed hands between 8.82% to 9.02%. Moving ahead on the yield curve, 15.06.2029, 15.09.2029 and 15.12.2029 traded between 9.49%-9.65%.

In the forex market, the LKR depreciated marginally against the greenback, closing at LKR 299.6/USD, compared to the previously seen rate of 299.4/USD. Meanwhile, overnight liquidity in the banking system expanded to LKR 156.7Bn from LKR 149.9Bn in the previous session.

Courtesy: First Capital Research

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