Both benchmark indices closed lower on subdued volumes, while the government’s latest T-Bond auction attracted full subscription and secondary market yields eased.
Key Highlights
The Colombo Stock Exchange closed lower on Tuesday, with trading activity falling well below recent norms. On the fixed income side, the Public Debt Management Office (PDMO) raised the full amount offered at its latest T-Bond auction, while the rupee firmed marginally against the US dollar.
Stock Market Summary
The All Share Price Index (ASPI) declined 65.12 points, or 0.31%, to close at 21,279.65. The S&P SL20 index fell 14.59 points, or 0.24%, to 5,994.81. CARG, DIAL, COMB, BREW and CDB were the largest negative contributors to the index.
Daily turnover totaled LKR 796.92Mn, a decline of 78.1% against the monthly average of LKR 3.6Bn. Trading volume stood at 27.22Mn shares. The Capital Goods sector accounted for 19% of turnover, while Materials and Banking contributed a combined 28%. Foreign investors were net sellers on the day, with a net outflow of LKR 4.14Mn (inflows of LKR 55.99Mn against outflows of LKR 60.14Mn). Month-to-date net foreign flow stands at an outflow of LKR 19.5Bn, with the year-to-date figure at an outflow of LKR 55.8Bn. Market valuations stood at a PER of 11.2x and PBV of 1.3x.
Fixed Income Summary
Ahead of Tuesday’s T-Bond auction, the secondary market saw active buying interest in the 2030 and 2036 maturities, with yields shifting downward across several tenors. At the auction, the PDMO raised the full LKR 50Bn offered: LKR 30.0Bn through the 2030 maturity at a weighted average yield of 10.54%, and LKR 20.0Bn through the 2035 maturity at 11.70%. In the T-Bill auction, yields eased across all tenors, with the 91-day and 182-day rates each down 16 basis points and the 364-day rate down 2 basis points.
Currency Market Update
The Sri Lankan rupee appreciated against the US dollar, closing at LKR 329.00, compared to LKR 329.45 in the previous session. Market liquidity in the banking system contracted to LKR 322.87Bn from LKR 333.21Bn.
Business Impact
Thinner equity trading volumes suggest reduced near-term risk appetite among investors, though valuations remain moderate. The fully-subscribed T-Bond auction and easing yields point to healthy government financing conditions and sustained investor demand for rupee debt, which can support borrowing costs across the wider economy. The rupee’s modest appreciation offers marginal relief for importers.
What to Watch Next
Market participants will watch whether equity turnover recovers toward its monthly average, and whether secondary market bond yields continue to ease following the auction result.
Key Numbers
| Metric | Value | Change |
|---|---|---|
| ASPI | 21,279.65 | -65.12 (-0.31%) |
| S&P SL20 | 5,994.81 | -14.59 (-0.24%) |
| Turnover | LKR 796.92Mn | -78.1% vs. monthly avg. |
| Volume | 27.22Mn shares | -59.4% |
| Net Foreign Flow (day) | -LKR 4.14Mn | — |
| Net Foreign Flow (MTD) | -LKR 19.5Bn | — |
| Net Foreign Flow (YTD) | -LKR 55.8Bn | — |
| USD/LKR | 329.00 | Appreciation from 329.45 |
| Banking System Liquidity | LKR 322.87Bn | Down from LKR 333.21Bn |
| T-Bond Auction (2030) | LKR 30.0Bn raised | WAvg yield 10.54% |
| T-Bond Auction (2035) | LKR 20.0Bn raised | WAvg yield 11.70% |
Source: Colombo Stock Exchange market data, Central Bank of Sri Lanka statistics and publicly available market information.