Sri Lankan shares closed higher on Thursday, driven by gains in communication services and utilities, as investors reacted to a surprise rate cut by the Central Bank of Sri Lanka.
The CSE All Share Index rose 0.7% to finish at 16,473.4, supported by increased trading activity and select stock surges.
In a bid to stimulate economic recovery amid lingering financial headwinds and the potential impact of U.S. trade tariffs, the central bank reduced its policy rate by 25 basis points. Analysts say while this move may not trigger an immediate market rally, it signals a shift toward supporting long-term economic stability.
“The cut is unlikely to generate a major market response; however, market players may expect a correction towards the end of the year depending on how inflation settles following the third quarter,” noted Raynal Wickremeratne, co-head of research at Softlogic Stockbrokers.
Key market movers included:
-
Nation Lanka Finance, which surged 100%
-
SMB Finance, gaining 50%, making them the top performers on the index
Trading volume increased to 277.3 million shares, up from 171 million in the previous session, reflecting heightened investor activity.
Market turnover also climbed sharply to 4.54 billion Sri Lankan rupees (approx. $15.17 million), nearly doubling the 2.43 billion rupees recorded previously.
Foreign investors were net buyers, acquiring stocks worth 606.4 million rupees, while domestic investors were net sellers, divesting 4.25 billion rupees in shares.
Despite the modest uptick, market analysts remain cautious, closely watching inflation trends and macroeconomic signals in the months ahead.
