COLOMBO, Sept 30 (Reuters) - Sri Lankan stocks posted a fourth straight session of gains on Friday to end at a near one-month closing high, led by blue chips, while the drop in T-bill yields boosted sentiment.
The benchmark index of the Colombo Stock Exchange ended up 0.1 percent, or 6.47 points, at 6,534.77, its highest close since Sept. 2.
The index posted a weekly gain of 0.86 percent, rising for the second week after four consecutive weekly losses.
"Market is up with a rally in blue chips coming into the market," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.
The central bank's widely expected decision on Wednesday to hold the rates steady suggested that policy makers were keen to support a slowing economy even as they kept a tight leash on rampant credit growth.
Treasury bill yields fell between 16 basis points and 33 basis points after the rate decision.
Analysts said they expected the stock index to rise this week due to the fall in the return on fixed income assets.
The bank has tightened policy three times since December.
Foreign investors bought a net 4.5 million rupees worth of shares on Friday. But they have been net sellers of 2.95 billion rupees worth of equities so far this year.
Turnover stood at 1.32 billion rupees ($9.00 million), more than this year's daily average of 756.3 million rupees.
Shares in conglomerate John Keells Holdings Plc climbed 0.65 percent, while the biggest-listed Lender Commercial Bank of Ceylon Plc rose 0.70 percent.
$1 = 146.7000 Sri Lankan rupees Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips