* Political stability; low rates push bourse up
* Rupee up on importer demand for dollars
COLOMBO, Sept 9 (Reuters) - Sri Lanka's benchmark share index hit a new record high on Thursday as investors picked up diversified and banking shares, with low interest rates and the
passage of a constitutional amendment boosting the market.
Sri Lanka's main share index .CSE jumped 1.02 percent or 60.79 points to hit a record of 6,023.41. It touched an intraday high of 6,065.59 points. The index is Asia's best performer in 2010 with a 78 percent gain.
Analysts said shrinking fixed-income returns and parliaments backing of a constitutional amendment on Wednesday boosted the market. Yields in 182- and 364-day T-bills fell 52 and 45 basis points respectively on Tuesday. [ID:nSGE686029]
The market has gained over 7.5 percent since the cabinet backed the amendment which became law on Wednesday, giving President Mahinda Rajapaksa the chance to run for a third term
after his present one expires in 2017. [nSGE67T0AC]
Shares in private lender Hatton National Bank HNB.CM jumped 7.49 percent to 330 rupees a share while the market heavyweight and top conglomerate John Keells Holdings JKH.CM rose 2.04 percent to 280.10 rupees.
Turnover was 4.2 billion rupees ($37.2 million), seven times the 2009 average. Foreign investors sold a net 37.7 million rupees' in shares, and they have sold a net 14.1 billion rupees' worth this year.
The rupee LKR= closed firmer at 112.65/68 a dollar from Wednesday's 112.72/75 due to high importer demand for dollars, dealers said.
Markets will be closed on Friday for the Muslim holiday of Id-Ul-Fitr, or the Ramazan festival. Trading resumes on Monday.
FACTORS TO WATCH:
- Why foreign investors are selling despite post-war economic optimism
- Whether there will be a drastic technical correction
- Tax reforms promised by the government
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