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COLOMBO, Oct 7 (Reuters) - Sri Lankan stocks edged up on Friday, after two successive sessions of losses, but the trading volume slumped to a near three-week low as investors awaited direction from the budget and corporate earnings.
The benchmark index of the Colombo Stock Exchange finished up 0.23 percent at 6,582.34.
"Investors are still positive and the outlook is bullish. Thin volume is because market interest rates are rising on tight liquidity," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.
"Going forward, better earnings in construction sector and select blue-chips will boost sentiment."
Turnover was 387.3 million rupees ($2.65 million), its lowest since Sept. 19, and around half of this year's daily average of around 755 million rupees.
Stockbrokers have said the market might see lower-trading volumes as many investors await direction from the budget, scheduled for Nov. 10, and the government's long-term economic policy announcement.
Foreign investors bought a net 55.9 million rupees worth of shares on Friday, but have sold a net 2.85 billion rupees worth of equities so far this year.
Shares in top lender Commercial Bank of Ceylon gained 1.4 percent, while the leading mobile operator Dialog Axiata ended up 0.9 percent.
$1 = 146.2500 Sri Lankan rupees Reporting by Shihar Aneez; Editing by Sherry Jacob-Phillips