The Colombo Bourse opened on a positive note before reversing sharply as selling pressure intensified.

The reversal was driven by heightened concerns surrounding the escalation of the war situation in the Middle East and rising global oil prices, which weighed heavily on investor sentiment.

The ASPI fell 81 points to close at 21,542, while the S&P SL20 closed at 6,065, marking a 12-point decline in line with the overall downward trend.

Top negative contributors to the ASPI index were CINS, BREW, CARS, SAMP and JKH. Retail investors were particularly active in selling index-heavy counters, contributing significantly to the market’s decline. Turnover was lower compared to the past few sessions, while HNW participation remained low as well.

Daily turnover stood at LKR 1.5Bn, marking a decrease of 44.7% over the monthly average of LKR 2.7Bn. Insurance sector led the daily turnover with a share of 23%, followed by the Capital Goods, and Materials sectors collectively contributing 27%. Foreign investors turned net buyers, posting a net inflow of LKR 13.6Mn.

BOND MARKET

Mixed sentiment grips secondary market activity

Secondary market activity demonstrated mixed tones, with volumes holding steady at moderate levels, whilst the yield curve remained broadly unchanged.

The PDMO announced the issuance of LKR 150.0Bn in T-Bonds, across 2030, 2034 and 2037 maturities on 11th Sep 2026.

Amongst the trades that were seen today, starting at the short end of the curve, the maturities dated 15.03.2028, 01.07.2028 and 15.12.2028 traded from 10.05% to 10.20%.

With the broader 2030 category, the 01.03.2030, 15.05.2030, 01.08.2030 and 15.10.2030 maturities traded at yields of 10.60%, 10.65%, 10.75% and 10.85%-10.80%, respectively.

The 01.02.2031 bond traded at 10.85% and the 01.12.2031 bond traded from 11.05% to 11.15%. The 01.10.2032 bond traded at 11.20%, followed by the 15.12.2032 bond, which traded at 11.25%. Amongst the 2033 bonds that saw activity, the 15.01.2033 bond traded from 11.30% to 11.35%, the 01.06.2033 bond traded at 11.60% and lastly, the 01.11.2033 bond traded from 11.65% to 11.80%.

Finally, approaching the end of the belly, the 15.10.2034 bond traded from 11.80% to 11.90%. On the external front, the LKR marginally appreciated against the USD, standing at LKR 328.21/USD, compared to LKR 328.34/USD seen earlier.

Market liquidity in the banking system slightly expanded to LKR 363.31Bn from LKR 362.14Bn recorded previously.

-First Capital Research