At 0633 GMT, the main stock index was up 0.07 percent at 7,167.23, the highest level since June 3.

"The market is positive, but it is not as positive as last week. It looks like it is losing the steam," said Dimantha Mathew, a research manager at First Capital Equities (Pvt) Ltd.

"With the start of the earning season, we expect some kind of movement due to earnings," Mathew said.

Sri Lankan President Maithripala Sirisena on July 14 criticised a comeback bid by Mahinda Rajapaksa, the rival he beat in elections last January, and his own allies for backing him to become prime minister.

Analysts see Sirisena's statement as a step towards strengthening his grip and one that is likely to help the ruling coalition win.

The day's turnover stood at 432.3 million rupees ($3.23 million) at 0635 GMT.

The Sri Lankan rupee was steady in dull trade as a state-owned bank maintained its dollar selling rate at 133.80, dealers said.

Dealers said a $1.1 billion currency swap agreement with the Reserve Bank of India has boosted the confidence on the currency.

(Reuters)