COLOMBO, July 22 Sri Lankan stocks hit a
34-month closing high on Tuesday, led by banking shares as local
investors shifted funds from fixed income to riskier assets in
view of the low interest rates, brokers said.
The main stock index ended up 0.59 percent, or 39.85
points, at 6,796.37, its highest close since Sept. 20, 2011.
"The market looks positive. If it continues to go up beyond
6,900 points, we may see a correction with profit-taking," said
a stockbroker asking not to be named.
The share index has gained 6.55 percent so far this month.
Turnover was 1.42 billion rupees ($10.90 million), more than
this year's daily average of about 1.09 billion rupees.
Foreign investors were net buyers of 213.1 million rupees
worth of shares on Tuesday, extending the year-to-date net
foreign inflow to 10 billion rupees in shares.
Biggest listed lender Commercial Bank of Ceylon Plc
rose 2 percent to 144.90 rupees.
The market is on the rise because investors have few options
in other instruments as yields of treasury bills and the central
bank's key monetary policy rates have fallen to multi-year lows
amid continued foreign buying.
Yields on treasury bills edged down further at a weekly
auction on Wednesday.
The index is in the overbought region since July 3. It has
risen 14.94 percent so far this year.
Lower interest rates have prompted local investors to buy
shares and move away from unattractive fixed assets, analysts
Analysts said foreigners have been buying risky assets
because they see value in them.
($1 = 130.2500 Sri Lankan Rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by