The main stock index rose 1.06 percent, or 65.88 points, to close at 6,287.00, its highest since Nov. 11, 2011.
Foreign investors bought 1.28 billion rupees ($10.16 million) of stocks. On a net basis, they bought 85.1 million rupees of shares, extending net foreign inflows this year to 10.85 billion rupees.
'Foreigners keep picking up blue chips on valuations, while low interest rates helps local retail activity,' a stockbroker said on condition of anonymity.
Yields in treasury bills fell in the range of 29 basis points to 45 bps on Wednesday after the central bank cut key policy rates by 50 bps last Friday, following some of its regional peers, to boost economic growth amid subdued demand.
Shares in John Keells Holdings rose 1.39 percent to 278.00 rupees, their all-time closing high.
Market turnover was 1.88 billion rupees on Thursday, well above this year's daily average of 1.04 billion rupees.
The rupee ended firmer at 125.80/85 from Wednesday's close of 125.90/126.10, helped by bank dollar sales on tighter rupee liquidity and equity inflows, currency dealers said. ($1 = 126.0250 Sri Lanka rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Prateek Chatterjee)
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