(Reuters) - Sri Lankan stocks hit their highest closing in more than three years on Friday, led by banking shares such as Commercial Bank of Ceylon Plc and DFCC Bank Plc amid low interest rates and continued foreign buying into risky assets.
The main stock index rose 0.38 percent, or 26.81 points, to close at 7,087.41, its highest close since June 14, 2011.
"The market is refusing to bend. Where do you go with the low interest rates? The market gives the better options," said Reshan Kurukulasuriya, chief operating officer of Richard Pieris Securities.
The index has gained nearly 19.87 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 79.320 on Friday, Thomson Reuters data showed.
Stocks are deemed "overbought" above the 70-mark, which tends to signal a reversal in the near term.
Commercial Bank of Ceylon, the country's biggest listed lender by market capitalisation, led gains with a rise of 2.85 percent at 155.30 rupees, while DFCC Bank rose 1.48 percent to 191.80 rupees.
Shares of Hatton National Bank Plc rose 1.40 percent to 173.30 rupees, while John Keells Holdings Plc rose 0.04 percent to 250 rupees.
After market hours on Wednesday, Fitch Ratings downgraded John Keells' National Long-Term Rating to 'AA+(lka)' from 'AAA(lka)'.
Exchange turnover was 1.25 billion rupees ($9.60 million), in line with this year's daily average of 1.2 billion rupees.
Foreign investors were net buyers of 198.2 million rupees worth of shares, extending the year-to-date net foreign inflows to 9.15 billion rupees.
The central bank did not offer 91-day t-bills at the weekly auction on Wednesday after it rejected all bids in the last two auctions, while yields on the 182-day and the 364-day treasury bills held steady for the third time.
The main stock index rose 0.38 percent, or 26.81 points, to close at 7,087.41, its highest close since June 14, 2011.
"The market is refusing to bend. Where do you go with the low interest rates? The market gives the better options," said Reshan Kurukulasuriya, chief operating officer of Richard Pieris Securities.
The index has gained nearly 19.87 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 79.320 on Friday, Thomson Reuters data showed.
Stocks are deemed "overbought" above the 70-mark, which tends to signal a reversal in the near term.
Commercial Bank of Ceylon, the country's biggest listed lender by market capitalisation, led gains with a rise of 2.85 percent at 155.30 rupees, while DFCC Bank rose 1.48 percent to 191.80 rupees.
Shares of Hatton National Bank Plc rose 1.40 percent to 173.30 rupees, while John Keells Holdings Plc rose 0.04 percent to 250 rupees.
After market hours on Wednesday, Fitch Ratings downgraded John Keells' National Long-Term Rating to 'AA+(lka)' from 'AAA(lka)'.
Exchange turnover was 1.25 billion rupees ($9.60 million), in line with this year's daily average of 1.2 billion rupees.
Foreign investors were net buyers of 198.2 million rupees worth of shares, extending the year-to-date net foreign inflows to 9.15 billion rupees.
The central bank did not offer 91-day t-bills at the weekly auction on Wednesday after it rejected all bids in the last two auctions, while yields on the 182-day and the 364-day treasury bills held steady for the third time.
($1 = 130.1800 Sri Lankan rupee)
(Reporting by Ranga Sirilal; Editing by Subhranshu Sahu)
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