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 October 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 low interest 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.
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