News & market updates

Global markets retreated as Brent rose ~4.2% to $104.21/bbl and U.S. crude to $91.93, while U.S. Treasury yields climbed, reversing a brief relief rally amid ongoing Middle East tensions. The dollar strengthened and spot gold fell about 1%.

National Transport Commission raised bus fares by 12.19% effective 12:01 a.m., lifting the minimum fare from Rs.27 to Rs.30 and the maximum from Rs.2,159 to Rs.2,422 after diesel rose to Rs.382/L. Western Province three-wheeler fares now start at Rs.110 for the first km and Rs.90 per additional km.

Asian stock markets plunged after US President Donald Trump's ultimatum to Iran, with Japan's Nikkei down about 4% and South Korea's KOSPI down about 4.5%; Brent crude briefly topped $114/bbl amid fears of disruptions to the Strait of Hormuz.

Asian currencies weakened as the South Korean won fell to a 17-year low, closing at 1,517.3 per USD amid volatility from the Middle East crisis. Other regional currencies including the rupiah, rupee, peso and baht also saw pressure, with some central bank intervention stabilising markets.

Secondary Treasury bond yields initially rose on external pressures but reversed and closed lower after Brent crude plunged >10% amid US de-escalation; selected maturities traded in ranges ~8.57%-11.23% and secondary turnover was Rs.23.63bn. Money markets showed a net liquidity surplus of Rs.240.27bn and the USD/LKR spot closed around Rs.313.00/314.00.

Indian sugar mills locked in about 100,000 metric tons of export shipments in a week as a record-low rupee and rising global prices restored the economics of overseas sales. Mills have contracted roughly 550,000 tons this season and India raised its export quota to 2 million tons.

President Anura Kumara Dissanayake directed officials to intensify public awareness and implement measures to cut electricity use during peak hours (6pm–10pm) to safeguard energy security amid global supply disruptions. Guidelines for government institutions and cuts to billboards/ornamental and non-essential street lighting were discussed.

Essential food importers warn retail prices could rise 10–20% ahead of the Sinhala and Tamil New Year as higher bunker fuel, freight and war-risk insurance costs plus a weakening rupee lift landed costs, while assuring there are currently no shortages.

Iran says it is ready to supply fuel and other essential goods to Sri Lanka if requested. The ambassador added the Strait of Hormuz remains accessible to friendly countries and Iran can assist the return of Sri Lankan nationals from Iran.

President Trump said he ordered US strikes on Iranian power plants postponed for five days after talks, and oil prices fell about 13–15% (Brent to roughly $96/bbl, WTI to $85.28/bbl session lows). The IEA warned the conflict has cut global oil supplies by about 11m bpd and called the crisis worse than the 1970s shocks.

ASPI fell 1.33% to 20,364.97 as the market reacted to Middle East tensions and rising crude oil prices. Market turnover was Rs.2.37bn, the market has lost over Rs.1.1tn since 28 Feb, primary negative contributors were DOCK, JKH, RIL, DIAL and CFIN, while JKH, SINS and DIAL saw largest foreign outflows and PKME, WIND and TAP largest inflows.

LAUGFS Gas PLC appointed Dhanusha Muthukumarana, Dr. Niroshan J. Pieries and Eng. Nalinda Kurukulasooriya as Non-Independent Directors; Muthukumarana was also appointed to the board of LAUGFS Power PLC.

Oil prices fell more than 13% after U.S. President Donald Trump said he would postpone military strikes on Iranian power plants and energy infrastructure; Brent dropped about $17 (15%) to around $96/bbl and U.S. WTI fell about $13 (13.5%) to $85.28.

Sri Lanka's rupee weakened to 313.00/314.00 per USD from 311.80/312.00, while government bond yields recovered and oil prices fell below $100 after the US announced a pause in planned strikes on Iran.

Iran says it will supply fuel and other essentials to Sri Lanka if requested, as Sri Lanka faces severe fuel shortages, a 25% recent price hike, aggressive rationing and reserves estimated to last six weeks. The government has imposed a four-day public-sector week and bears roughly LKR 20 billion monthly in fuel subsidies.

Colombo Stock Exchange closed lower as the ASPI fell 1.35% to 20,360.27 and the S&P SL20 slid 1.06% to 5,691.97. WindForce rose after winning a 10 MW/40 MWh BESS contract worth Rs1.73bn and was the top positive contributor, while Colombo Dockyard and John Keells were top negatives; turnover was Rs2.37bn.

IEA says more than 40 energy assets across nine West Asian countries have been severely or very severely damaged, risking prolonged oil, gas and fuel supply disruptions and higher energy prices. The IEA has released a record 400 million barrels from emergency reserves and may release more.

Lanka IOC revised fuel prices from midnight on 21 March in line with CPC's changes, raising Super Diesel by Rs.90 to Rs.443 and Octane 95 by Rs.90 to Rs.455. The adjustments follow wider supplier increases amid Middle East tensions that have pushed diesel up about 35%.

Economist Talal Rafi warned the Middle East war could complicate Sri Lanka's debt path as IMF program plans boost external reserves from ~$8.9bn to $13.4bn by end-2027 and envisage a $1.5bn ISB in 2027, with annual external debt servicing rising from $2bn to $3bn; he noted reform-dependent opportunities in renewables and data centres.

CBSL data: the primary surplus rose 170.30% to Rs. 1,755.81 billion in 2025 and the overall budget deficit narrowed 63.49% to Rs. 744.86 billion. Revenue grew 34.09% (tax revenue up 36.30%), government debt reached Rs. 29.9 trillion, and 2026 risks include Cyclone Ditwah and the Middle East conflict.

Uber and PickMe jointly urged the government to grant higher fuel quotas for their most-engaged drivers and delivery partners, saying the recent quota increase from 21 March remains insufficient to sustain operations. They said enhanced weekly allocations would help maintain essential services, livelihoods and tourism support.

Asia shares fell while US 10-year Treasury yields hit an eight-month high of 4.415% as the Gulf war escalated and Brent oil traded around $112.62 a barrel, lifting inflation and pushing markets to price out rate cuts.

Uber and PickMe jointly urged the Government to allocate higher weekly fuel quotas for their most engaged drivers and couriers, saying the recent regular quota increase from 21 March remains insufficient to sustain operations. They said enhanced allocations would support mobility, deliveries and tourism while platforms will monitor trip volumes to use fuel efficiently.

Sri Lanka Bottled Water Association has asked President Dissanayake to revoke or suspend CAA Gazette No.2430/15 that sets MRPs for bottled water (e.g., Rs.70 for 500–999ml, Rs.100 for 1–1.499L). The group says rising fuel, PET, shipping and electricity costs make the fixed prices unsustainable for small and medium producers.

Secondary government bond yields rose sharply across the curve last week (selected tenors up 20–30bps; long-end approaching ~11%) as geopolitical risk, higher global rates and oil gains drove selling. T-bill auction rates held, foreign holdings fell by Rs 1.38bn, and USD/LKR closed ~Rs.311.85/312.00.

Colombo Stock Exchange slid midday as the ASPI fell 1.53% to 20,323.75 amid US-Iran tensions; top negative contributors were John Keells (-1.64% to Rs.18.00), Sampath Bank (-1.49% to Rs.149.25), Hayleys (-1.20% to Rs.205.00) and Central Finance (-1.84% to Rs.213.00).

Speakers at an OPA seminar warned the Middle East conflict will raise global energy prices, strain fuel supplies (fuel ≈20% of Sri Lanka's import bill), and hit tourism and remittances (≈40% from the Middle East), urging price reforms, renewables, maritime and cyber security upgrades.

Government says it has no plans for power cuts despite ongoing fuel shortages. CPC chairman said the state oil firm is incurring a Rs. 204.56 loss per litre of diesel after a recent price rise of Rs. 140 and urged the public to use electricity sparingly.

Ceylon Petroleum Corporation raised fuel prices effective March 21, lifting Octane 92 to Rs.398 and white diesel to Rs.382 as petrol and diesel prices rose roughly 21–26%, with other grades also reaching levels last seen in the 2022 crisis amid rising global oil prices.

Gulf escalation and shipping disruptions have hit Sri Lanka's tourism, tea and apparel sectors, pulling the bourse down 12.7% through March 20; plantation and apparel stocks plunged (Namunukula -30.6%, Agalawatte -22%, Teejay Lanka -20.6%) while Sunshine benefits from higher palm oil prices.