Sri Lanka stocks closed higher on Tuesday as strong buying interest in banking and capital goods counters lifted key indices, pushing the S&P SL20 to its highest level in six weeks. Market sentiment remained broadly positive amid rising turnover and regional equity strength.
Sri Lanka stocks extend gains on banking strength and rising investor confidence
Sri Lanka stocks ended Tuesday’s trading session on a firm note, supported by sustained investor interest in banking shares and selected capital goods companies. The All Share Price Index advanced by 1.21 percent, gaining 278.16 points to close at 23,292.91, reflecting broad-based buying across heavyweight counters.
The more liquid S&P SL20 index outperformed the broader market, rising 2.19 percent to close at 6,379.11. This marked a six-week high for the index, surpassing its previous level of 6,364.61 recorded on November 21, according to data published by the Colombo Stock Exchange. The sharp advance highlighted renewed confidence in blue-chip stocks, particularly within the banking sector.
Banking shares were among the strongest contributors to the market’s upward momentum. Hatton National Bank climbed 17.50 rupees to close at 417.50, while Commercial Bank gained 5.25 rupees to finish at 212.50. Sampath Bank rose 2.75 rupees to close at 151.25, and National Development Bank added 6 rupees to end the session at 147. These gains underscored the sector’s continued appeal amid expectations of stable earnings and improving economic conditions.
Diversified holdings and capital goods stocks also contributed positively. John Keells Holdings advanced by 50 cents to close at 22.10 rupees, adding support to the benchmark indices. Together, these heavyweight stocks accounted for a significant portion of the day’s index movement, reinforcing the leadership role played by fundamentally strong counters.
Market activity remained robust throughout the session. Turnover increased to 6.5 billion rupees, up from 5.7 billion rupees in the previous session, indicating improved participation from both retail and institutional investors. Share volume reached 154,747,777 shares, with a total of 42,361 trades recorded, reflecting healthy liquidity conditions.
Several notable crossings were recorded during the session, including trades in Commercial Bank, John Keells Holdings, Laugh Gas, and Sanasa Development Bank. These negotiated transactions further boosted turnover and signaled continued interest in selected large-cap and mid-cap stocks.
Despite the overall positive performance, the exchange recorded a net foreign outflow of 87 million rupees. The outflow was led primarily by Digital Mobility Solutions (Lanka), which accounted for 21 million rupees. Foreign investor activity remained cautious, even as domestic participation strengthened, a trend that has been evident in recent sessions.
The All Share Total Return Index rose by 2.96 percent, while the S&P SL20 Total Return Index climbed 3.35 percent, reflecting the combined impact of price appreciation and dividend-related adjustments. These gains highlighted the improving return profile of Sri Lankan equities over the short term.
Individual stock movements also reflected sector-specific developments. Lanka IOC shares rose 1.75 rupees to close at 132 following a revision of fuel prices effective January 6, after a similar price adjustment by state-run Ceypetco. The market appeared to factor in potential margin implications and revenue adjustments linked to the revised pricing structure.
Regional market performance provided a supportive backdrop. Asian equity markets largely advanced during the session, contributing to improved sentiment. Japan’s Nikkei 225 index climbed 1.32 percent to close at a record high of 52,518.08, driven by strong gains in blue-chip stocks. Hong Kong’s Hang Seng index ended 1.38 percent higher at 26,710.45, while Singapore’s Straits Times Index rose 0.27 percent to close at 4,739.97.
Markets in South Asia showed mixed performance. India’s Nifty 50 index was trading 0.28 percent lower, while the Sensex declined 0.44 percent. In contrast, Pakistan’s Karachi Stock Exchange 100 index gained 1.45 percent to close at 185,062.10, reflecting regional divergence in investor sentiment.
Meanwhile, global commodities also showed movement, with spot gold trading higher at 4,455.30 US dollars as of 4.20 pm Sri Lankan time, up 0.46 percent. The rise in gold prices reflected continued interest in safe-haven assets alongside equity market gains.
Overall, the latest session reinforced the upward momentum in Sri Lanka stocks, with banking and blue-chip counters driving index performance. While foreign investor participation remains selective, rising turnover and strong domestic buying suggest improving confidence in the equity market’s near-term outlook.