Early optimism fades as currency pressure triggers market pullback

By Almas Equities Research

The Colombo Stock Exchange witnessed a volatile trading session today, as early optimism driven by easing geopolitical tensions in the Middle East was later overshadowed by concerns surrounding the sharp depreciation of the Sri Lankan Rupee against the US Dollar. Positive developments regarding the de-escalation of the Middle East conflict initially lifted investor sentiment, helping the ASPI gain nearly 280 points during the first hour of trading.

However, the market failed to sustain these gains as panic selling emerged following the rapid increase in the USD/LKR exchange rate. The sharp currency movement created renewed uncertainty among investors, prompting cautious trading behavior and dragging the market significantly lower from its intraday highs. Despite the pullback, both indices managed to close marginally positive for the session.

Today’s market turnover was led by the Banking sector, which recorded LKR 0.59 Bn with 2.93 Mn shares traded. HNB.N emerged as the top contributor within the sector, generating LKR 0.38 Bn in turnover with 0.96 Mn shares traded.

At the close, the ASPI gained 44.72 points (+0.21%) to settle at 21,833.77, while the S&P SL20 edged up by 4.71 points (+0.08%) to close at 6,038.71. Total market turnover stood at LKR 2.15 Bn, with share volume recorded at 76.62 Mn shares.

Crossings accounted for LKR 0.39 Bn, representing 18% of total turnover, with the largest crossing recorded in HNB.N amounting to LKR 0.30 Bn involving 0.75 Mn shares traded. Market breadth improved, with 134 gainers against 83 decliners, indicating relatively positive participation despite the cautious undertone.

On the positive side, MELS.N (+10.60 points) led index gains, followed by DOCK.N, ACL.N, PLC.N, and CCS.N. On the downside, CFIN.N (-5.26 points) emerged as the main drag, while RICH.N, CARG.N, GRAN.N, and SFCL.N also weighed on overall market performance.

Among notable trades, SHL.N recorded active participation with LKR 0.01 Bn in turnover and 4.14 Mn shares traded, posting a price gain of 5.04%, reflecting selective buying interest in mid-cap counters.