COLOMBO, May 12 (Reuters) - Sri Lankan shares ended marginally higher on Friday, near a one-year high, led by gains in blue chips such as Ceylon Tobacco Company Plc and conglomerate John Keells Holdings Plc.
Stockbrokers said they expect the bullish trend to continue next week with the central bank holding key policy rates steady amid falling T-bill yields.
With the pressure on the rupee abating and yields on government securities easing, the central bank kept key interest rates steady at a policy meeting on Tuesday.
The Colombo stock index ended 0.08 percent firmer at 6,671.98, its highest close since May 18, 2016. The index added 0.5 percent this week, its seventh straight weekly gain.
"The interest rate decision is a boost to the market. That was kind of a direction to say now the trend in the rising interest rate should reverse," said Hussain Gani, deputy CEO at Softlogic Stockbrokers.
Financial markets were closed on Wednesday and Thursday for Buddhist religious holidays.
Turnover stood at 651.6 million rupees ($4.28 million), less than this year's daily average of 891 million rupees.
Foreign investors net bought shares worth 38.5 million rupees, extending their year-to-date investment in equities to 16.81 billion rupees.
They bought a net 14.32 billion rupees in the last 33 sessions, out of which, foreign investors were net buyers in 32.
Reduction of 36-38 basis points in T-bill yields in the last three weeks, stable currency on expectation of inflows from foreign borrowing, and an IMF statement on the disbursement of the third tranche of a $1.5 billion loan, have helped boost sentiment, analysts said.,,
Shares in Ceylon Tobacco Company Plc rose 0.7 percent, while John Keells Holdings Plc gain 0.5 percent and Commercial Bank of Ceylon Plc, the country's biggest listed lender, climbed 0.9 percent. ($1 = 152.3000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)