(Reuters) - Sri Lankan stocks hovered around 33-month highs on Monday, as local investors took advantage of low interest rates to shift funds from fixed income assets to risk assets despite foreign outflows, brokers said.
The main stock index ended up 0.51 percent, or 34.32 points, at 6,756.52, near its highest close since Oct. 3, 2011 hit on Wednesday.
"There would be miner corrections here and there, but we see continued buying," said a stockbroker asking not to be named.
"There is stability in the market. With the positive outlook, investors are holding on."
The share index has gained 5.92 percent so far this month.
Turnover was 904 million rupees ($6.94 million), slightly below this year's daily average of about 1.09 billion rupees.
Foreign investors were net sellers for the first time in the last eight sessions, selling 215.13 million rupees worth of shares on Monday. But they have been net buyers of shares worth 9.8 billion rupees so far this year.
Shares of Lion Brewery (Ceylon) Plc rose 4.05 percent to 667.60 rupees, while Commercial Bank of Ceylon Plc rose 1.99 percent to 143.30 rupees.
The market is on the rise because investors have little 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 14.27 percent so far this year.
Lower interest rates have prompted local investors to buy shares and move away from unattractive fixed assets, analysts said.
Analysts said foreigners have been buying risky assets because they see value in them.
($1 = 130.2300 Sri Lankan Rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Prateek Chatterjee)
The main stock index ended up 0.51 percent, or 34.32 points, at 6,756.52, near its highest close since Oct. 3, 2011 hit on Wednesday.
"There would be miner corrections here and there, but we see continued buying," said a stockbroker asking not to be named.
"There is stability in the market. With the positive outlook, investors are holding on."
The share index has gained 5.92 percent so far this month.
Turnover was 904 million rupees ($6.94 million), slightly below this year's daily average of about 1.09 billion rupees.
Foreign investors were net sellers for the first time in the last eight sessions, selling 215.13 million rupees worth of shares on Monday. But they have been net buyers of shares worth 9.8 billion rupees so far this year.
Shares of Lion Brewery (Ceylon) Plc rose 4.05 percent to 667.60 rupees, while Commercial Bank of Ceylon Plc rose 1.99 percent to 143.30 rupees.
The market is on the rise because investors have little 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 14.27 percent so far this year.
Lower interest rates have prompted local investors to buy shares and move away from unattractive fixed assets, analysts said.
Analysts said foreigners have been buying risky assets because they see value in them.
($1 = 130.2300 Sri Lankan Rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Prateek Chatterjee)
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