The Colombo Bourse remained under pressure today, with selling sentiment emerging following yesterday’s increase in bond yields in the secondary market.

The higher yields weighed on investor appetite for equities as investors reassessed the relative attractiveness of fixed-income investments.

The ASPI fell 52 points to close at 21,262, while the S&P SL20 declined by 18 points to close at 5,977. Top negative contributors to the ASPI were DIAL, CINS, BREW, MELS and JKH.

Turnover was slightly above average, recovering from yesterday’s low, supported by increased participation from HNW and corporate investors, while retail participation remained below average.

Daily turnover stood at LKR 2.2Bn, marking a decrease of 8.6% over the monthly average of LKR 2.4Bn. Food Beverage & Tobacco sector led the daily turnover with a share of 54%, followed by the Capital Goods, and Banking sectors collectively contributing 29%. Foreign investors remained net sellers, posting a net outflow of LKR 63.1Mn. 

BOND MARKET

Selling pressure at the belly moves yields higher”

Secondary market activity was marked by high trading volumes amidst an emergence of selling pressure, directed towards the 2030-2033 maturity bracket at the belly end.

This resulted in an overall uptick in the yield curve, with a wider movement at the belly. Starting at the short end, the 15.12.2028 bond traded at 10.55%, followed by the 15.09.2029 and 15.12.2029 bonds, which traded at yields of 10.95% and 11.05%, respectively.

Moving on to the 2030 segment, the 01.07.2030, 01.08.2030 and 15.10.2030 maturities traded from 11.15% to 11.50%. Moving along the curve, the 01.02.2031 maturity traded from 11.45% to 11.55%, followed by the 01.12.2031 bond which changed hands at 11.50%.

The 15.12.2032 bond transacted from 11.80% to 11.90%, whilst the 15.01.2033 and 01.11.2033 bonds traded from 11.90% to 11.95%. The 15.06.2034 maturity traded at 12.15% and lastly, the 15.10.2034 bond traded at 12.02%.

The Department of Census and Statistics released the GDP growth figure for 2Q2026, which stood at 4.2%, reflecting a moderation from the 5.1% level seen in 1Q2026. 

On the external front, the LKR depreciated against the USD, standing at LKR 329.04/USD, compared to LKR 328.68/USD seen earlier. Market liquidity in the banking system contracted to LKR 347.55Bn compared to LKR 381.40Bn recorded previously.

-First Capital Research-