Sri Lankan shares edged up to their highest close in seven weeks on Tuesday led by diversified shares, but volume was light as investors awaited cues from the political front ahead of a parliamentary vote on proposed constitutional reforms. The main stock index ended up 0.13 percent at 7,134.43, its highest close since March 9. It has gained 3.38 percent since the central bank cut key rates on April 15, while yields on t-bills have fallen 41-51 basis points since then.
Investors have been cautious due to political uncertainty as Prime Minister Ranil Wickremesinghe's party does not have a majority in parliament and President Maithripala Sirisena promised to dissolve parliament after the end of his 100-day programme on April 23. The passage of reform measures, including establishing independent police, judiciary, and election and public service commissions, is seen as a test for Sirisena's government.