Early rally fades as profit-taking reverses gains amid geopolitical uncertainty

By Almas Equities Research

The Colombo Stock Exchange started today’s session on a strong positive note, supported by news of a potential peace deal between Iran and the USA. The ASPI surged by more than 240 points within the first 15 minutes of trading, reflecting strong early optimism and broad-based buying interest across the market.

However, the initial momentum proved short-lived as selling pressure gradually intensified, driven by profit-taking and shifting investor sentiment. As the session progressed, the market reversed its early gains and eventually closed in negative territory. Overall sentiment remained cautious, with investors closely tracking geopolitical developments while continuing to show selective interest in fundamentally strong, earnings-supported counters.

Today’s trading activity was led by the Capital Goods sector, which recorded LKR 0.67 Bn in turnover with 16.82 Mn shares traded. HHL.N was the key contributor within the sector, generating LKR 0.24 Bn in turnover with 7.84 Mn shares traded.

At the close, the ASPI declined by 15.40 points (-0.07%) to 22,298.07, while the S&P SL20 fell by 13.21 points (-0.21%) to 6,148.77. Total market turnover stood at LKR 2.32 Bn, with share volume recorded at 93.16 Mn shares.

Crossings accounted for LKR 0.29 Bn, representing 12% of total turnover, with the largest crossing recorded in HHL.N amounting to LKR 0.17 Bn involving 5.44 Mn shares traded. Market breadth remained slightly negative, with 100 gainers against 107 decliners, indicating mild but broad-based selling pressure.

On the positive side, DIAL.N (+7.07 points) led index gains, followed by VONE.N, DOCK.N, BIL.N, and CCS.N. On the downside, SAMP.N (-7.35 points) was the main drag, while MELS.N, COMB.N, HNB.N, and LFIN.N also weighed on overall sentiment.

Among notable trades, PHAR.N recorded activity with LKR 0.01 Bn turnover and 99,165 shares traded, posting a price gain of 14.12%, reflecting selective speculative interest despite the broader market weakness.