Sri Lankan shares hit 3-month high; turnover spikes

COLOMBO, April 30 Wed Apr 30, 2014 7:29am EDT

COLOMBO, April 30 (Reuters) - Sri Lankan shares rose to their three-month peaks on Wednesday in high turnover as investors bought large caps such as Ceylon Tobacco Company Plc in small quantities.

A lower interest rate regime helped the market, with turnover hitting a three-week high, though foreign investors sold the island nation's risky assets.

The country's main stock index rose 0.6 percent, or 37.42 points, to 6,223.67, its highest since Jan. 31.

The market gained 4.28 percent in April as some retail investors started buying risky assets in the face of low interest rates.

"The market looks positive, interest rates are also coming down," said a stockbroker.

Lower interest rates have helped the market gain in the past few weeks and we have seen activity across the board, stockbrokers said.

Last week the central bank kept policy rates steady at multi-year lows.

The day's turnover was 1.23 billion rupees ($9.42 million), its highest since April 9 and more than this year's daily average of 956.5 million rupees.

Shares of Union Bank of Colombo rose 0.47 percent to 21.50 rupees, while Ceylon Tobacco Company advanced 3.18 percent to 1,099.20 rupees. Aitken Spence rose 0.71 percent to 98.70 rupees.

Offshore investors were net sellers of 55 million rupees worth of stocks on Wednesday, extending the net foreign selling so far this year to 7.19 billion rupees. ($1 = 130.6100 Sri Lanka Rupees) (Reporting by Ranga Sirilal; Editing by Subhranshu Sahu)

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