Sri Lankan shares at near 12-week high; financials lead

May 20 (Reuters) – Sri Lankan shares rose on Wednesday to their highest close in nearly 12 weeks on strong turnover, led by financials on expectations of better quarterly earnings.

The main stock index rose 0.32 percent, or 23.57 points, to close at 7,289.77, its highest close since Feb. 27.

Wednesday’s turnover was 2.14 billion rupees ($16 million), nearly twice this year’s daily average of about 1.12 billion rupees.

"High networth and institutional investor participation was witnessed," NDB Securities (Pvt) Ltd said in a market report.

National Development Bank gained 2 percent, while LB Finance jumped 7.1 percent, leading the rise in the overall index.

Financial firms reported strong earnings in the last quarter and analysts said the market expects the trend to continue due to growing private sector credit in a low interest rate regime.

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 5.6 percent since the rate cut.

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