(Reuters) - Sri Lankan stocks closed at their highest in nearly 39 months on Tuesday, led by diversified and banking shares, as low interest rates and continued buying by foreign investors into risky assets boosted investor sentiment.
The main stock index rose 0.51 percent, or 36.03 points, to close at 7,123.44, its highest closing since June 13, 2011.
"There was lot of foreign interest seen in Keells (John Keells Holdings Plc) and it seems to be continuing," said Dimantha Mathew, Manager (Research) at First Capital Equities (pvt) Ltd.
"We are seeing a slow and steady movement in the market; the run has been steady and backed by earnings."
The index has gained nearly 20.48 percent so far this year.
The bourse has been in an overbought region since July. The Relative Strength Index, a momentum indicator tracked by chartists, was at 83.088 on Tuesday, Thomson Reuters data showed.
Stocks are deemed "overbought" above the 70-mark, signalling a reversal in the near term.
Market heavyweight John Keells Holdings Plc led the gains in the overall index with a rise of 2.44 percent at 256.10 rupees, while Commercial Bank of Ceylon, the country's biggest listed lender by market capitalisation, rose 1.74 percent to 158 rupees.
Exchange turnover was 1.92 billion rupees ($14.75 million), higher than this year's daily average of 1.2 billion rupees.
Foreign investors were net buyers of 309.9 million rupees worth of shares, extending the year-to-date net foreign inflows to 9.46 billion rupees.
Sri Lanka's stock and foreign exchange markets were closed on Monday for a Buddhist holiday.
The main stock index rose 0.51 percent, or 36.03 points, to close at 7,123.44, its highest closing since June 13, 2011.
"There was lot of foreign interest seen in Keells (John Keells Holdings Plc) and it seems to be continuing," said Dimantha Mathew, Manager (Research) at First Capital Equities (pvt) Ltd.
"We are seeing a slow and steady movement in the market; the run has been steady and backed by earnings."
The index has gained nearly 20.48 percent so far this year.
The bourse has been in an overbought region since July. The Relative Strength Index, a momentum indicator tracked by chartists, was at 83.088 on Tuesday, Thomson Reuters data showed.
Stocks are deemed "overbought" above the 70-mark, signalling a reversal in the near term.
Market heavyweight John Keells Holdings Plc led the gains in the overall index with a rise of 2.44 percent at 256.10 rupees, while Commercial Bank of Ceylon, the country's biggest listed lender by market capitalisation, rose 1.74 percent to 158 rupees.
Exchange turnover was 1.92 billion rupees ($14.75 million), higher than this year's daily average of 1.2 billion rupees.
Foreign investors were net buyers of 309.9 million rupees worth of shares, extending the year-to-date net foreign inflows to 9.46 billion rupees.
Sri Lanka's stock and foreign exchange markets were closed on Monday for a Buddhist holiday.
($1 = 130.1800 Sri Lankan rupee)
(Reporting by Ranga Sirilal; Editing by Biju Dwarakanath)
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