Sri Lankan shares settled higher on Friday, powered by gains in financial stocks with lender LOLC Development Finance extending gains for a fourth straight session.

The CSE All-Share Index closed up 0.74% at 7,715.46.

Rating agency Fitch Ratings said on Friday it recalibrated its Sri Lanka National Rating scale.

Earlier this week, Fitch affirmed the country at "CCC", indicating the possibility of a debt default.

Still, the nation's main stock index has added 1.4% this week, fuelled mostly by gains in financial stocks.

Lender LOLC Development Finance surged 25% and was the top boost. The stock has surged 121% this week.

Sri Lanka reported 233,064 total confirmed coronavirus cases as of Friday, and 2,425 deaths, according to health ministry data.

The island nation has fully vaccinated only 3.22% of the country's population so far, Johns Hopkins data.

After market close on Thursday, the country's central bank said earnings from the tourism sector remained subdued in April, but workers' remittances continued to grow compared to the same period last year.

Trading volume on Friday fell to 73.9 million from 165.9 million in the previous session.

Foreign investors were net sellers in the equity market, off-loading shares worth 99.8 million rupees, exchange data showed.