Sri Lankan shares closed more than 1 percent up on Friday, trading in high volumes after the International Monetary Fund said it had reached a staff-level agreement with the island nation for a $1.5 billion three-year loan.
Investors were also buoyed by positive sentiment after the central bank left rates steady earlier this week.
The benchmark stock index ended up 1.14 percent, or 73.73 points, higher at 6,516.26, its highest close since Jan. 13.
“It’s purely on the IMF deal. The buying came in and we will see this trend continuing for a few more days,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.
“But it could be a short-lived one with expected poor earnings while interest rates have been on the rise,” he said, referring to the increase in the market interest rates until last week as the central bank allowed the rise to ease the pressure on the rupee.