Sri Lankan stocks edged up on Tuesday, hovering near three-year highs, led by retail buying in manufacturing and telecommunication shares, while the low interest rates boosted sentiment, brokers said. Analysts say an increase in speculative trading in fundamentally weak shares could dent the healthy growth the index has seen this year. The main stock index ended 0.42 percent, or 29.29 points firmer, at 7,013.32, its highest close since August 18, 2011.
The index has gained 18.61 percent so far this year. "Big caps are slightly slow today the index is up on some illiquid shares and on retail activity," said Dimantha Mathew manager, research at First Capital Equities (Pvt) Ltd. The index plummeted more than 20 percent after it hit a record peak in February 2011 mainly due to speculative trading. Companies' earnings were recovering and the bourse had seen a 22 percent year on year net growth in earnings of 272 companies, First Capital Equities said in a note to investors.