Colombo stock market reacts positively to CBSL rate cut

Friday, 23 May 2025 00:14 - - {{hitsCtrl.values.hits}}

The cut in the Overnight Policy Rate (OPR) by the Central Bank of Sri Lanka (CBSL) had a positive impact on the Colombo stock market yesterday, with indices and turnover gaining relatively higher.

The benchmark ASPI gained by 0.7% and the active S&P SL20 by 0.54%. Turnover was Rs. 4.54 billion involving 277.35 million shares.

The Monetary Policy Board at its meeting on Wednesday evening decided to reduce the OPR by 25 bps to 7.75%, thereby easing monetary policy further.

First Capital said the Colombo Stock Exchange’s (CSE) rally followed the CBSL’s announcement of an OPR reduction, which buoyed investor sentiment and led to a steady upward trajectory throughout the session. Key contributors to the index’s performance included CARG, MELS, JKH, DIAL, and HHL. HNW and retail investors remained active, with notable HNW interest directed towards Banking sector counters. Market turnover marked an 85% increase over the monthly average.

The Capital Goods sector led activity, accounting for 26% of total turnover, followed by the Diversified Financials and Food, Beverage and Tobacco sectors, which collectively contributed 30%.

Foreign investor participation also showed strength, with a net inflow of Rs. 313.4 million, signalling sustained interest in select equities amid improving macroeconomic signals.

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