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COLOMBO, June 9 (Reuters) - Sri Lankan shares rose on Monday to their highest close in one week, helped by blue chips, while foreign inflows hit a more than three-week high as offshore investors mainly bought shares of conglomerate John Keells Holdings Plc.
Analysts said continued foreign buying and expectations of interest rates coming further down boosted sentiment.
The main stock index ended 0.13 percent, or 7.89 points, firmer at 6,287.03, its highest close since June 2.
The bourse saw net foreign inflow for an eighth straight session. Foreign investors bought 924.1 million rupees ($7.09 million) worth of shares on Monday, extending the year-to-date net foreign inflows to 5.11 billion rupees.
Turnover was 1.39 billion rupees, the highest since May 16 and more than this year's daily average of 1 billion rupees.
Analysts said the market expects a further fall in interest rates after central bank governor Ajith Nivard Cabraal told Reuters on May 30 that the central bank was creating room to cut interest rates further.
Stockbrokers expect the market to gain in the near future due to lower interest rates. The central bank will announce its June monetary policy rates on June 18.
Shares in leading fixed line telephone operator Sri Lanka Telecom Plc, which boosted the overall index, rose 1.71 percent to 47.50 rupees a share, while John Keells Holdings Plc which accounted for 54.3 percent of the day's turnover, edged down 0.04 percent to 234.80 rupees a share. ($1 = 130.2500 Sri Lankan Rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anupama Dwivedi)