October 2, 2017 / 11:45 AM / 10 months ago

Sri Lankan shares hit 7-week closing high; banks gain

COLOMBO, Oct 2 (Reuters) - Sri Lankan shares rose for a third straight session on Monday to end at their highest close in seven weeks led by banks and diversified shares, while continued foreign buying in the market underpinned positive sentiment.

The Colombo stock index ended 0.51 percent up at 6,470.96, its highest close since Aug. 14.

The index gained 0.2 percent last week, recording its third straight weekly gain.

Foreign investors bought a net 11 million rupees ($71,895) worth of shares on Monday, extending their year-to-date net foreign inflow to 18 billion rupees worth of equities.

Turnover stood at 549.4 million rupees, less than two-third of this year’s daily average of 914.8 million rupees.

“We expect the overall positive sentiment in the market to continue for a few more days,” said Dimantha Mathew, head of research at First Capital Holdings.

“High net worth and retail investor participation was seen in plantation sector, though it did not impact the overall market. Meanwhile, institutions and foreign investors were looking to buy blue chips.”

Analysts said the market shrugged off a statement by the International Monetary Fund, which on Friday said Sri Lanka’s central bank should be ready to tighten monetary policy to contain inflation and credit growth.

Shares of Ceylon Tobacco Company Plc rose 3 percent while, Lanka ORIX Leasing Company Plc ended 4 percent firmer while Hatton National Bank Plc gained 2.1 percent.

On Tuesday, the Sri Lankan central bank held its key rates steady, saying past steps were keeping inflation and credit growth under control, as policymakers focus on supporting an economy hit by extreme weather. ($1 = 153.0000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

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