Stock market closes the week positively, despite Friday’s dip due to Middle-East tensions

The Colombo Stock Exchange (CSE) ended the week on a positive note. Despite a significant drop on Friday due to rising geopolitical tensions in the Middle East following a major attack by Israel on Iran, the overall market performance remained strong. 

Investors became cautious during the Friday session, which led to a decline. However, earlier in the week, the market showed healthy momentum driven by strong financial year-end reports.

The All Share Price Index (ASPI) closed at 17,427.08, marking a 32.65-point, or 0.18 percent gain. Meanwhile, the S&P SL20 Index also posted an increase of 15.91 points to close at 5,191.86, up 0.30 percent. The top contributor to the index was Hayleys PLC, adding 17.68 points to the ASPI.

Sampath Bank PLC recorded the highest turnover for the week, generating Rs.753 million from a share volume of 6.24 million. The diversified financial sector led in sectoral performance with the highest overall turnover of Rs.3.3 billion. Additionally, the highest turnover through crossings was recorded by Royal Ceramics Lanka PLC, reaching nearly Rs.303.11 million for the week.

On the macroeconomic front, Sri Lanka’s private credit expanded by Rs.71 billion in April 2025. Credit to the government also increased, though at a more moderate pace, with an expansion of Rs. 57.2 billion.

On the global front, crude oil prices experienced a notable rise, driven by concerns over potential supply disruptions amid escalating tensions in the Middle East. On Friday, prices exceeded US$ 75 per barrel following Israeli strikes on Iran. Overall, Brent and WTI crude oil prices rose by US$ 9.24 and US$9.93 per barrel, respectively.

Amid escalating tensions in the Middle East, a sharp rise in global oil prices is anticipated, which could significantly impact the local economy. A potential increase in fuel prices may lead to a short-term slowdown in economic activity. 

In such a scenario, it is advisable to focus on value investments and maintain a long-term perspective. This approach helps sustain gains in the equity market and avoid the risks associated with panic selling and losing valuable positions. (Almas Equities Research)