The main stock index ended up 1.48 percent, or 106.26 points, at 7,304.70, its highest close since Jan. 29.

"People see value in shares after a steep fall following the budget on Jan. 29. Confidence is returning as the government has committed for fiscal consolidation and growth by boosting consumption," a stockbroker said.

Foreign investors bought a net 581.7 million rupees ($4.4 million) worth of shares on Tuesday, extending net foreign inflow so far this year to 1.41 billion rupees. The bourse had net foreign inflows of 22.07 billion rupees last year.

Tuesday's turnover was 3.28 billion rupees ($24.70 million), its highest since Jan. 9 and more than double of this year's daily average of 1.43 billion rupees.

Shares of Ceylon Tobacco Co Plc rose 6 percent while Hatton National Bank Plc rose 4.41 percent.

Conglomerate John Keells Holdings Plc gained 3.58 percent on foreign buying.

(Reuters)