COLOMBO, June 21 (Reuters) - Sri Lankan shares rose on Wednesday to a 17-month closing high, on gains in financials and food and beverage stocks, ahead of the central bank's policy review later in the week where interest rates are expected to be held steady.
The Colombo stock index gained 0.38 percent at 6,731.25, its highest close since Jan. 7, 2016.
Foreign investors bought a net 259.1 million rupees ($1.7 million) worth of shares on Wednesday, extending the year-to-date net foreign inflow to 20.88 billion rupees in equities.
Turnover was 903.2 million rupees ($5.9 million), compared with this year's daily average of 909.3 million rupees.
"We are getting into a bullish territory again after a slowdown," said Dimantha Mathew, head of research, First Capital Holdings PLC.
"Investors do not expect a rate hike this month and they wait for the policy rate announcement. The overall market is bullish with the hope of no rate hike."
The central bank is expected to keep its key policy rates steady on Friday, a Reuters poll showed.
Shares of conglomerate John Keells Holdings Plc rose 1.2 percent, while Hatton National Bank Plc ended 1.2 percent higher. ($1 = 153.2000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)