COLOMBO, Feb 8 (Reuters) - Sri Lankan shares edged up on Wednesday, continuing to recover from an over 10-month closing low hit earlier in the week, as investors picked up battered blue chips, but concerns over rising market interest rates weighed on sentiment.
The Colombo stock index ended 0.1 percent firmer at 6,096.39. The index hit its lowest close since March 2016 on Monday.
"Investors are looking for bargain prices," said Reshan Kurukulasuriya, chief operating officer, Richard Pieris Securities (Pvt) Ltd, adding shares of John Keells Holdings Plc saw strong buying.
Sri Lankan stocks, which have been declining since October, have been impacted by political uncertainty arising from a decision of the ruling coalition parties to contest local polls separately, and on worries over a rise in market interest rates.
The central bank on Tuesday kept its key rates steady for a sixth straight month, but flagged possible "corrective measures" in the months ahead in a sign further tightening might be on the cards to temper inflation pressures and safeguard a fragile rupee.
Yields on treasury bills rose 2-8 basis points at a weekly auction on Tuesday, hovering at more than four-year high.
Market turnover was 506.8 million rupees ($3.37 million), lower than this year's daily average of 616.5 million rupees.
Foreign investors, who have been net sellers of 1.03 billion rupees worth of shares so far this year, net bought 152.3 million rupees worth of equities on Wednesday.
Shares of John Keells rose 1.3 percent, Dialog Axiata Plc gained 2.9 percent and Sri Lanka Telecom Plc climbed 2 percent. ($1 = 150.5000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)