Sri Lanka's main share index closed 0.53 percent or 38.75 points up to 7,358.69, its highest close since May 9.

Motor vehicle importer and assembler Lanka Ashok Leyland , a largely illiquid share, jumped 20 percent in thin trade.

Foreign investors were net buyers with an inflow of 556.5 million rupees' worth of shares on Monday. They have sold a net 5.27 billion in 2011, and a record 26.4 billion in 2010.

Turnover was 2.03 billion Sri Lanka rupees ($18.5 million), below last year's average of 2.4 billion rupees and this year's daily average of 2.81 billion rupees.

Traded volume was 97.1 million, against a five-day average of 80.4 million. The 30-day and 90-day average trading volumes were 58.1 million and 65.3 million, respectively. Last year's daily average was 67.9 million.

The bourse is still Asia's best performer in 2011 with a 10.9 percent gain, after bringing in the region's top return of 96 percent last year.

The rupee edged down to 109.78/80 a dollar from Friday's close of 109.76/78 on  importer  dollar demand, dealers said.

Both the stock and currency markets will be closed on Tuesday and Wednesday for a Buddhist religious holiday. Normal trading will resume on Thursday.

FACTORS TO WATCH:

Impact of global commodity price volatility on the Sri Lankan bourse

If Sri Lanka can achieve an 8.5 pct growth target amid rising global oil prices and inflation