26/05/2026
Stocks Give Up Gains As Central Bank Delivers Outsize Rate Hike...
The All -Share Price Index (ASPI) snapped its three-day rising streak as it gave up 0.85% and close at 22,175.14. Meanwhile, the more liquid S&P SL20 index followed suit, sliding 0.98% to settle at 6,118.26. With today’s losses, the broader index is now 1.99% lower for the year while the S&P SL20 is down by 0.64% on the year.
Central Bank meanwhile delivered a higher than expected 100bps increase in its Overnight Policy Rates (OPR) to slow the growth in credit, overall demand and thereby the inflation which is expected to remain shy of 6% in May.
Higher rates are typically negative for equities as it compress cash flows in companies but the market could take today's move in strides as it would ensure broad economic stability over an economy out of kilter.
Market breadth leaned negative, with 48 gainers against 165 decliners. The ASPI’s weakness was primarily driven by Sampath Bank PLC (SAMP.N), Hayleys PLC (HAYL.N) and John Keells Holdings PLC (JKH.N).
Market turnover came in at LKR 4.93Bn, marginally below the YTD average daily turnover of LKR 4.96Bn. Trading activity was led by Softlogic Life Insurance PLC (AAIC.N) which had a crossing of over LKR 3.00Bn. This was followed by Hatton National Bank PLC (HNB.N) and Hatton National Bank PLC ( Non-Voting) (HNB.X). Sector-wise, activity was concentrated in Insurance, Banking and Diversified Financials.
Meanwhile, despite flare up in tensions, indirect negotiations are still taking place with representatives from Tehran travelling to Qatar to discuss points of contention in a potential deal to end the war.