Sri Lanka shares end higher; central bank sees inflation peak above target in Q2 next year

Sri Lankan shares closed higher on Friday, aided by growth across segments, including materials and industrials.

The CSE All-Share index settled 2.16% higher at 16,936.69.

The index closed 1.2% higher for the week.

Sri Lanka’s headline inflation is expected to peak around 2 percentage points above the central bank’s target in the second quarter of 2026, the bank said in a monetary policy report.

“While headline inflation may edge above the target between late 2025 and mid-2026, projections indicate that this deviation will be short-lived,” the bank said in its report.

Broad-based gains lift Sri Lankan shares

UB Finance Company and R I L Property Plc were the top gainers on the index, up 14.3% and 13.3%, respectively.

Trading volume on the index rose to 139 million shares from 111.3 million shares in the previous session.

The equity market’s turnover rose to 4.89 billion Sri Lankan rupees ($16.56 million) from 3.59 billion rupees in the previous session, according to exchange data.

Foreign investors were net sellers, offloading stocks worth 867 million rupees, while domestic investors were net buyers, purchasing shares worth 4.54 billion rupees, the data showed.