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Sri Lankan shares at 11-week high; banks lead

COLOMBO, May 19 (Reuters) – Sri Lankan shares closed at their highest level in 11 weeks on Tuesday, led by banking and diversified stocks on the back of strong earnings, brokers said.

The main stock index rose 0.15 percent, or 11.18 points, to close at 7,266.20, its highest close since Feb. 27.

"Market is up because of the earnings, banking sector was very good. The sector is moving heavily with large caps playing a major role," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

Tuesday’s turnover was 1.56 billion rupees ($11.7 million), more than this year’s daily average of about 1.12 billion rupees.

Foreign investors were net buyers of shares worth 273.4 million rupees on Tuesday, extending the year to date net foreign inflow to 6.01 billion rupees in equities.

Political uncertainty due to Prime Minister Ranil Wickremesinghe-led UNP not having a parliament majority has been a drag on the market, though the trend reversed after the central bank cut key monetary policy rates to record lows on April 15.

The index has gained 5.29 percent since the rate cut.

Shares of Aitken Spence Hotel Holdings Plc rose 5.32 percent, while Ceylon Tea services Plc rose 9.15 percent.

Shares in Seylan Bank Plc rose 3.09 percent while conglomerate John Keells holdings Plc rose 0.25 percent.

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