COLOMBO, July 25 (Reuters) - Sri Lankan shares rose for a third straight session on Thursday to hit their highest close in nearly five months, led by a rally in banks, but the rupee weakened on higher importer dollar demand. Foreign investors were net sellers of stocks.
** The country’s benchmark stock index ended 0.85% up at 5,794.66, its highest close since Feb. 28.
**The index is down about 4.26% so far this year. ** The country’s stock market had a turnover of 743.6 million Sri Lankan rupees ($4.22 million), more than this year’s daily average of about 611.1 million rupees so far. Last year’s daily average came in at 834 million rupees. ** Foreign investors sold a net 84.6 million rupees worth of shares on Thursday; the year-to-date net buying stood at 1.39 billion rupees, index data showed. ** Shares of country’s biggest listed lender Commercial Bank of Ceylon jumped 4.9%, Hatton National Bank Plc rose 5.2%, DFCC Bank Plc climbed 7.5% and Dialog Axiata Plc ended 0.9% firmer. ** Meanwhile, the currency ended 0.03% weaker at 176.15/25 per dollar, compared with Wednesday’s close of 176.10/25, as importer demand for the greenback outpaced the dollar selling by banks. ** The rupee is up 3.66% so far this year. ** The central bank left key interest rates unchanged on July 11 as expected, after cutting them in May to support the economy as tourism and investment plummeted in the wake of deadly suicide bombings in April. ** Foreign investors bought a net 1.22 billion rupees worth of government securities in the week ended July 17, but the market has seen a year-to-date net foreign outflow to 18.46 billion rupees, the central bank data showed. ** For a report on global markets, click ** For a report on major currencies, click ($1 = 176.2000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; editing by Uttaresh.V)