Today’s sentiment in the Colombo Stock Market was largely influenced by the escalating tensions between the U.S. and Iran, with both the ASPI and S&P SL20 indices closing in negative territory.

Accordingly, the ASPI declined by 72 points to close at 21,345, while the S&P SL20 index fell by 19 points to close at 6,009. COMB, MELS, BREW, CTC and RICH emerged as the top negative contributors to the index.

Retail investor participation remained moderate. On the back of crossings in CTHR and CARG, Daily turnover stood at LKR 16.9Bn, marking an increase of 474.8% over the monthly average of LKR 2.9Bn.

Food & Staples Retailing sector led the daily turnover with a share of 94%, followed by the Food Beverage & Tobacco, and Capital Goods sectors collectively contributing 3%. Foreign investors remained net sellers, posting a net outflow of LKR 909.9Mn

The week opens on a quiet note in the secondary market

The week got off to a quiet start in the secondary market, with some slight buying interest and moderate trading volumes. Additionally, the PDMO concluded the weekly T-Bill auction today, due to the shortened trading week.

Over the short-end, 01.07.2028 traded at 10.15% and 15.09.2029 traded between 10.35% - 10.30%. Moving ahead, 15.12.2032 changed hands at 11.30%, while the long-dated 15.08.2036 maturity was dealt within a narrow range of 12.00% - 11.97%. At the weekly T-Bill auction, PDMO successfully raised the full initial offer of LKR 120.0Bn.

The 3M bills raised LKR 50.0Bn, while 6M and 12M bills raised LKR 35.0Bn each, on par with the amounts initially offered. The weighted average yields on the 3M and 6M bills declined by 16bps to 9.06% and 9.44%. Meanwhile, the 12M T-bill yield declined by 2bps to 9.89%.

On the external front, the LKR appreciated against the USD, standing at LKR 329.45/USD, compared to LKR 330.17/USD seen earlier. Market liquidity in the banking system expanded to LKR 333.21Bn from LKR 278.51Bn recorded previously.

Popular maturities:

01.07.2028: unchanged

15.09.2029: -13bps

15.12.2032: +12bps

15.08.2036: unchanged

-First Capital Research