The main stock index rose for a fourth straight session to close 0.09 percent, or 5.45 points, up at 5,967.62, its highest close since Sept. 29, 2012.
Shares have been rising on hopes of a fall in interest rates after Treasury Secretary P.B. Jayasundera and the central bank said official interest rates could ease in May and June.
The market has risen 3.3 percent since the treasury secretary's comments on official interest rates.
The recent rally has pushed the index to an overbought region with the Relative Strength Index at 80.559 on Monday, above the upper neutral region of 70.
'With the expectation of rates coming down, a lot of retail activities are coming in with a bit of foreign participation,' said a stockbroker.
The turnover was 845.84 million rupees ($6.67 million), lower than this year's daily average of 965 million rupees.
Foreign investors were net buyers of 114.95 million rupees worth shares, extending the net foreign inflow so far this year to 8.7 billion rupees. Last year, the bourse saw a net inflow of $303 million.
The rupee ended slightly firmer at 126.65/85 per dollar from Friday's close of 126.77/80, as state banks sold dollars, currency dealers said. ($1 = 126.7500 Sri Lanka rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)
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