(Reuters) - Sri Lankan stocks hit 33-month highs on Tuesday, led by diversified shares such as Carson Cumberbatch Plc and John Keells Holdings Plc a day after the central bank left policy rates steady at multi-year low.
Continued foreign buying also boosted sentiment.
The central bank kept policy rates steady at multi-year lows for a sixth straight month, as expected, despite private sector credit growth slowing to a 4-1/2-year low.
The main stock index rose 0.43 percent, or 28.76 points, to 6,727.79, its highest close since Oct. 3, 2011.
The index is in overbought region since July 3 as it has gained 5.47 percent so far this month, Thomson Reuters data showed.
"There can be profit-taking here and there, but the market will continue to gain with lowinterest rates and continued foreign buying. Investors are awaiting to see how the foreigners are reacting (in an overbought situation)," said a stockbroker asking not to be named.
Turnover was 2.19 billion rupees ($16.82 million), twice this year's daily average of around 1.09 billion rupees. Foreign investors accounted for 45.7 percent of the day's turnover.
Foreign investors were net buyers of 48.6 million rupees worth of shares on Tuesday, extending net foreign inflows in stocks to 9.46 billion rupees so far this year.
Tuesday's gains were led by Carson Cumberbatch, which rose 7.14 percent to 450 rupees, and Bukit Darah Plc, which gained 4.60 percent to 674.7 rupees.
Shares in conglomerate John Keells Holdings gained 1.29 percent to close at 243.4 rupees.
Lower interest rates have prompted local investors to buy shares and shift their savings from unattractive fixed assets, analysts said, as yields on treasury bills edged down further at a weekly auction on Wednesday.
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.
Continued foreign buying also boosted sentiment.
The central bank kept policy rates steady at multi-year lows for a sixth straight month, as expected, despite private sector credit growth slowing to a 4-1/2-year low.
The main stock index rose 0.43 percent, or 28.76 points, to 6,727.79, its highest close since Oct. 3, 2011.
The index is in overbought region since July 3 as it has gained 5.47 percent so far this month, Thomson Reuters data showed.
"There can be profit-taking here and there, but the market will continue to gain with lowinterest rates and continued foreign buying. Investors are awaiting to see how the foreigners are reacting (in an overbought situation)," said a stockbroker asking not to be named.
Turnover was 2.19 billion rupees ($16.82 million), twice this year's daily average of around 1.09 billion rupees. Foreign investors accounted for 45.7 percent of the day's turnover.
Foreign investors were net buyers of 48.6 million rupees worth of shares on Tuesday, extending net foreign inflows in stocks to 9.46 billion rupees so far this year.
Tuesday's gains were led by Carson Cumberbatch, which rose 7.14 percent to 450 rupees, and Bukit Darah Plc, which gained 4.60 percent to 674.7 rupees.
Shares in conglomerate John Keells Holdings gained 1.29 percent to close at 243.4 rupees.
Lower interest rates have prompted local investors to buy shares and shift their savings from unattractive fixed assets, analysts said, as yields on treasury bills edged down further at a weekly auction on Wednesday.
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.
($1 = 130.1800 Sri Lankan Rupees)
(Reporting by Ranga Sirilaland Shihar Aneez; Editing by Anand Basu)
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