Sri Lanka stocks close at more than two-month high on blue chips, inflows

COLOMBO, April 16 Wed Apr 16, 2014 7:28am EDT

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COLOMBO, April 16 (Reuters) - The Sri Lankan share index rose to a more than two-month high on Wednesday, led by blue chips and foreign inflows.

The main stock index ended up 0.44 percent at 6,118.85, its highest close since Feb. 11.

Though the day's turnover at 745.2 million rupees ($5.7 million) was less than this year's daily average of 980.6 million rupees, foreign buying accounted for 64.6 percent of turnover.

Many local investors were in a holiday mood as the stock and currency markets are trading only on Wednesday and Thursday this week due to the Sinhala-Tamil new year, followed by Good Friday.

The bourse saw net foreign inflows for a sixth straight session. Offshore investors bought 276.3 million rupees worth of stocks, though they have net sold 8.04 billion rupees of shares so far this year.

Top conglomerate John Keells Holdings, which accounted for around 40 percent of the day's turnover, ended steady at 238 rupees. Commercial Bank of Ceylon, the top listed private lender, edged up 0.16 percent to 127 rupees.

Analysts said the outlook was still positive due to prevailing lower interest rates.

Brokers said the stock market, valued at $19.62 billion as of Wednesday's close, is gradually attracting investors who are looking for higher returns than the deposit rates of around 6-6.5 percent offered by banks and financial companies.

Analysts, however, expect foreigners could shift from the island nation's risky assets if Sri Lanka does not cooperate in an international probe conducted by the Office of the United Nations' High Commissioner for Human Rights on the country's alleged war crimes and human rights abuses.

Sri Lanka's foreign minister said last week that the country would not cooperate with the inquiry.

The bourse has seen 3.9 billion rupees in outflows since a UN resolution voted for an international probe.

($1 = 130.6000 Sri Lanka Rupees) (Reporting by Shihar Aneez in Colombo; Editing by Prateek Chatterjee)

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