COLOMBO, July 9 (Reuters) - Sri Lankan stocks rose for a sixth straight session on Wednesday to their highest closing level in 33 months as lower interest rates prompted investors across the board to buy risky assets despite foreign selling, stockbrokers said.
The gains were led by diversified shares like conglomerate John Keells Holdings PLC and telecom shares like Sri Lanka Telecom PLC.
The main stock index ended up 0.73 percent, or 48.03 points, at 6,613.84, its highest close since Oct. 10, 2011.
Shares in Sri Lanka Telecom, which led the index gain, rose 3.84 percent to 51.40 rupees, while John Keells Holdings rose 1.28 percent to 237.60 rupees.
“Local investors are increasingly participating in the market and local retailers are also coming in because of the low interest rates,” said a stockbroker asking not to be named.
“But sustainability is depending on the earnings.”
Yields on treasury bills edged down further at a weekly auction on Wednesday.
Turnover was 2.89 billion rupees ($22.19 million), around thrice this year’s daily average of around 1.07 billion rupees.
Foreign investors were net sellers of 278.6 million rupees worth of shares on Wednesday, but have been net buyers of 8.94 billion rupees worth of shares so far this year.
Analysts said foreigners have been buying risky assets because they see value in them, while falling yields in fixed assets gradually prompt local investors to shift to equities.
The market has been on a rising trend since late February due to continued foreign buying and lower interest rates and has risen 11.86 percent so far this year.
$1 = 130.2300 Sri Lankan rupees Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair