(Reuters) - Sri Lankan stocks gained for a second straight session on Wednesday, recovering from a near four-week closing low hit early this week, as banks rose in thin volume.
However, stock brokers expect volatility in the near future amid worries about early presidential polls and a mixed signal on interest rates.
President Mahinda Rajapaksa could hold a snap election in January, nearly two years before he has to, a close ally said, amid signs his popularity is fading among people who criticise his party for abusing power.
Yields on 364-day t-bills rose 11 basis points to 6.00 percent, the first rise since Dec 20, 2013.
Local investors have been buying stocks as they have no other options in a multi-year low interest rate regime.
Sri Lanka's main stock index gained 1.16 percent, or 83.36 points, to 7,288.83 after marking its lowest closing level since Sept. 17 on Monday.
Commercial Bank of Ceylon Plc led gains with a 3.88 percent rise, while conglomerate John Keells Holdings Plc rose 1.13 percent.
The day's turnover was 1.6 billion rupees ($12.25 million), more than this year's daily average of over 1.36 billion rupees.
Foreign investors bought 201.3 million rupees worth of shares on Wednesday, extending the year-to-date net foreign inflow to 9.54 billion rupees, exchange data showed.
However, stock brokers expect volatility in the near future amid worries about early presidential polls and a mixed signal on interest rates.
President Mahinda Rajapaksa could hold a snap election in January, nearly two years before he has to, a close ally said, amid signs his popularity is fading among people who criticise his party for abusing power.
Yields on 364-day t-bills rose 11 basis points to 6.00 percent, the first rise since Dec 20, 2013.
Local investors have been buying stocks as they have no other options in a multi-year low interest rate regime.
Sri Lanka's main stock index gained 1.16 percent, or 83.36 points, to 7,288.83 after marking its lowest closing level since Sept. 17 on Monday.
Commercial Bank of Ceylon Plc led gains with a 3.88 percent rise, while conglomerate John Keells Holdings Plc rose 1.13 percent.
The day's turnover was 1.6 billion rupees ($12.25 million), more than this year's daily average of over 1.36 billion rupees.
Foreign investors bought 201.3 million rupees worth of shares on Wednesday, extending the year-to-date net foreign inflow to 9.54 billion rupees, exchange data showed.
($1 = 130.6000 Sri Lankan rupee)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)
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