(Reuters) - Sri Lankan stocks closed at their highest in more than three years on Wednesday, led by diversified shares such as John Keells Holdings Plc and banking stock Commercial Bank of Ceylon Plc, as low interest rates and continued buying by foreign investors into risky assets boosted investor sentiment.
The main stock index rose 0.56 percent, or 39.81 points, to close at 7,163.25, its highest close since June 13, 2011.
"There'll be some correction down the line but the bull run will continue with the positive sentiment," said a stockbroker asking not to be named.
The index has gained nearly 21.15 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 84.016 on Wednesday, 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 1.17 percent at 259.10 rupees, while Commercial Bank of Ceylon, the country's biggest listed lender by market capitalisation, rose 1.39 percent to 160.20 rupees.
Exchange turnover was 2.06 billion rupees ($15.82 million), more than this year's daily average of 1.21 billion rupees.
Foreign investors were net buyers of shares worth 360.7 million rupees on Wednesday, extending the year-to-date net foreign inflows to 9.82 billion rupees.
Treasury bill rates fell further by one basis point at Wednesday's auction for the 182-day and 364-day maturities.
The central bank did not offer 91-day t-bills at the weekly auction on Sept. 3 after it rejected all bids in the previous two auctions. It held the 182-day and the 364-day treasury bills steady during the previous three auctions.
($1 = 130.2000 Sri Lankan rupee) (Reporting by Ranga Sirilal; Editing by Biju Dwarakanath)
The main stock index rose 0.56 percent, or 39.81 points, to close at 7,163.25, its highest close since June 13, 2011.
"There'll be some correction down the line but the bull run will continue with the positive sentiment," said a stockbroker asking not to be named.
The index has gained nearly 21.15 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 84.016 on Wednesday, 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 1.17 percent at 259.10 rupees, while Commercial Bank of Ceylon, the country's biggest listed lender by market capitalisation, rose 1.39 percent to 160.20 rupees.
Exchange turnover was 2.06 billion rupees ($15.82 million), more than this year's daily average of 1.21 billion rupees.
Foreign investors were net buyers of shares worth 360.7 million rupees on Wednesday, extending the year-to-date net foreign inflows to 9.82 billion rupees.
Treasury bill rates fell further by one basis point at Wednesday's auction for the 182-day and 364-day maturities.
The central bank did not offer 91-day t-bills at the weekly auction on Sept. 3 after it rejected all bids in the previous two auctions. It held the 182-day and the 364-day treasury bills steady during the previous three auctions.
($1 = 130.2000 Sri Lankan rupee) (Reporting by Ranga Sirilal; Editing by Biju Dwarakanath)
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