Sri Lankan shares ended higher on Wednesday, after two straight sessions of losses, boosted by communication services stocks.

At the close of trade, the CSE All-Share index was up 0.33% at 13,122.95.

Telecom firms Sri Lanka Telecom Plc and Dialog Axiata Plc were the top boosts to the index, rising 24.8% and 6.4%, respectively.

Foreign investors were net sellers in the equity market, offloading shares worth 223.2 million rupees ($1.10 mln), while domestic investors were net buyers of shares worth 7.67 billion rupees, exchange data showed.

Sri Lankan shares end lower as industrials, financials drag

The equity market's turnover was 7.77 billion rupees.

Trading volume fell to 317.3 million shares, from 357.5 million shares in the previous session.

The South Asian country is facing its worst financial crisis in decades with foreign exchange reserves shrinking.

Sri Lanka has to also repay about $4.5 billion in debt this year, with a $500 million International Sovereign Bond maturing next week.

The governor of Sri Lanka's central bank said on Wednesday the government would meet all debt repayments in 2022 and work on a more comprehensive plan to address its dwindling foreign exchange reserves.

S&P Global Ratings earlier in the day lowered its long-term sovereign credit rating on Sri Lanka to 'CCC', from 'CCC+', saying the country's external position continues to weaken due to elevated external obligations and an uneven access to financing.

S&P said Sri Lanka's economic recovery would be challenged by the ongoing pandemic and external financial stresses.

The ratings agency forecast real gross domestic product growth of 2.2% this year, compared with its estimate of 3% expansion in 2021.