Key Highlights
- ASPI closed lower at 21,416.57, down 63 points (-0.29%)
- S&P SL20 fell to 6,020.38, down 21 points (-0.34%)
- Market turnover of LKR 1.54 billion, nearly half the monthly average
- All three T-bill tenors saw yields decline at the weekly auction; the 12-month rate slipped below 10%
- LKR firmed slightly to 331.83 against the US dollar
- Banking system liquidity contracted to LKR 288.98 billion
Stock Market Summary
The Colombo Stock Exchange closed lower for the session, with both benchmark indices in negative territory. Trading was thin, with turnover of LKR 1.54 billion running well below the monthly average of LKR 3.0 billion, and volume falling to 43.87 million shares. Retail participation was muted, leaving high-net-worth and institutional investors to drive most of the day’s activity, largely through crossings. The Food, Beverage & Tobacco sector led turnover at 30%, followed by Banking and Capital Goods, which together contributed a further 42%. Foreign investors were net buyers on the day at LKR 103.2 million, though this sits against month-to-date net outflows of LKR 18.5 billion and year-to-date outflows of LKR 54.8 billion.
Fixed Income Summary
The secondary bond market saw modest, mixed activity across the yield curve, with yields at several tenors easing on a week-on-week basis. At the weekly Treasury bill auction, the PDMO raised the full LKR 140.0 billion offered. Yields declined across all tenors: the 3-month bill fell 22 basis points to 9.22%, the 6-month bill eased 18 basis points to 9.60%, and the 12-month bill dropped 10 basis points to 9.91%, moving back into single-digit territory. Longer-dated bonds, including the 2037 maturity, continued to draw foreign investor interest.
Currency Market Update
The Sri Lankan rupee firmed marginally against the US dollar, trading at LKR 331.83 compared with LKR 332.29 in the prior session. Banking system liquidity contracted slightly to LKR 288.98 billion from LKR 292.85 billion.
Business Impact
Easing short-term yields point to modestly improving financing conditions for businesses and the government alike, while subdued equity turnover suggests investors are exercising caution amid low retail engagement. The rupee’s stability continues to support predictability for importers and exporters managing near-term costs.
What to Watch Next
Market participants will be watching whether the decline in T-bill yields extends into upcoming auctions, and whether equity turnover recovers from its current lull as retail investors return to the market.
Source Attribution
Source: Colombo Stock Exchange market data, Central Bank of Sri Lanka statistics and publicly available market information.