The Colombo Bourse opened the session with some selling pressure before bargain hunting at lower price levels encouraged renewed buying interest.

The market gradually recovered and managed to close in positive territory, with the ASPI gaining 124 points to close at 22,157, while the S&P SL20 rose by 17 points to close at 6,366, investor sentiment was potentially supported by anticipation surrounding the upcoming budget speech.

The top positive contributors to the ASPI were SLTL, DIST, DIAL, TKYO and LOFC. Despite the positive close, both HNW and retail participation remained lower compared to the previous session. Overall turnover also declined, reflecting a moderation in trading activity.

Daily turnover stood at LKR 3.0Bn, marking an increase of 38.4% over the monthly average of LKR 2.1Bn. Capital Goods sector led the daily turnover with a share of 17%, followed by the Telecommunication, and Materials sectors collectively contributing 33%. Foreign investors turned net sellers, posting a net outflow of LKR 111.5Mn.

BOND MARKET

Calculated buying stance pushes yields lower

With the budget speech for 2027 in the limelight today, investors exercised cautious optimism and embraced a modest buying stance.

The yield curve adjusted down marginally across the board in response, while investor participation and trading volumes appeared moderate.

Within the 2030 segment, 01.03.2030, 15.05.2030, 01.08.2030 and 15.10.2030 traded from 11.10% to 10.90%. Moving ahead, 01.02.2031 and 01.12.2031 changed hands from 11.10% to 11.00% while 01.10.2032 and 01.12.2032 were seen trading within the 11.50%-11.40% range.

At the belly of the curve, 15.01.2033, 01.06.2033 and 01.11.2033 traded from 11.75% to 11.53%. Finally, 15.06.2034 and 15.10.2034 traded within 11.95% to 11.83% while 15.08.2036 changed hands at 12.10%. On the external front, the LKR depreciated marginally against the USD, standing at LKR 332.36/USD, compared to LKR 332.35/USD seen previously. Market liquidity in the banking system expanded to LKR 463.00Bn compared to LKR 445.07Bn seen previously.

-First Capital Research-