Sri Lankan shares extend gains led by financials

Sri Lankan shares closed higher on Wednesday, with financial stocks supporting gains for a second straight session.

The CSE All-Share Index closed up 0.47% at 7,641.19 on Wednesday. However, the index is still off 15.3% from its lifetime high seen in January.

The island nation's services sector purchasing managers' index was at 39.45 index points in May, down by 9.4 index points from April, central bank data showed on Tuesday.

Still, on Wednesday stocks extended gains to a second session with financials accounting for nearly half the gains.

Lender LOLC Development Finance surged 25% and was the top boost. The stock has added 43.8% so far in June, compared to a 3.2% rise the main index has seen.

Sri Lanka reported 228,256 total confirmed coronavirus cases as of Wednesday, and 2,315 deaths, according to health ministry data.

The island nation lifted travel restrictions earlier this week, but has fully vaccinated only 2.8% of the country's population so far, Johns Hopkins data showed.

Rating agency Fitch on Tuesday affirmed the country at "CCC", which indicates a real possibility of a debt default.

Fitch also said Sri Lanka's medium-term debt service challenges are substantial and pose risks to sovereign's debt repayment capacity.

Trading volume on Wednesday rose to 88.2 million from 68 million in the previous session.

Foreign investors were net sellers in the equity market, offloading shares worth 503.4 million rupees, exchange data showed.

Equity market turnover was 2.71 billion rupees, according to exchange data.