(Reuters) - Sri Lankan shares closed at their highest in more than a month on Wednesday, led by financials on hopes of better earnings, with positive sentiment continuing due to lower interest rates, dealers said.
The main stock index ended 0.26 percent up 7,117.13, its highest close since March 10. It had gained 3.13 percent since the central bank cut key rates on April 15, while yields on government securities have fallen 26-36 basis points since then.
"There was some interest in some of the finance companies and micro finance companies with low interest rates," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.
"There was buying interest on earning expectation," he added but cautioned that this would not last long as markets would stay volatile until parliamentary elections are announced.
The market saw a net foreign outflow of 131.9 million rupees ($992,476) on Wednesday, but net foreign buying stood at 3.7 billion rupees so far this year.
Turnover was 1.04 billion rupees, in line with this year's daily average of around 1.09 billion rupees.
Analysts said the market would be dull due to political uncertainty and that many investors were in a wait-and-watch mode before the parliamentary elections.
Shares of Lanka Orix Leasing Company Plc rose 2.96 percent, while Ceylon Tea Services Plc jumped 12.61 percent.
The index lost 6.6 percent last month, its biggest monthly drop since October 2012, as investors sold holdings to settle margin trades amid concerns about political stability and a rise in interest rates.
The main stock index ended 0.26 percent up 7,117.13, its highest close since March 10. It had gained 3.13 percent since the central bank cut key rates on April 15, while yields on government securities have fallen 26-36 basis points since then.
"There was some interest in some of the finance companies and micro finance companies with low interest rates," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.
"There was buying interest on earning expectation," he added but cautioned that this would not last long as markets would stay volatile until parliamentary elections are announced.
The market saw a net foreign outflow of 131.9 million rupees ($992,476) on Wednesday, but net foreign buying stood at 3.7 billion rupees so far this year.
Turnover was 1.04 billion rupees, in line with this year's daily average of around 1.09 billion rupees.
Analysts said the market would be dull due to political uncertainty and that many investors were in a wait-and-watch mode before the parliamentary elections.
Shares of Lanka Orix Leasing Company Plc rose 2.96 percent, while Ceylon Tea Services Plc jumped 12.61 percent.
The index lost 6.6 percent last month, its biggest monthly drop since October 2012, as investors sold holdings to settle margin trades amid concerns about political stability and a rise in interest rates.
Investors have been cautious due to political uncertainty as Prime Minister Ranil Wickremesinghe's party does not have a majority in parliament, stockbrokers said.
($1 = 132.9000 Sri Lankan rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)
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