COLOMBO, Sept 13 (Reuters) - Sri Lanka's benchmark index edged up on Tuesday to recover from a seven-week closing low hit in the previous session, led by blue-chips, but investors stayed on the sidelines amid confusion over falling bond yields.
The benchmark Colombo stock index ended up 0.2 percent at 6,508.09, edging up from its lowest close since Aug. 1 hit on Friday. The bourse fell 0.68 percent last week, posting its third straight weekly loss.
"The index ended higher amid lacklustre turnover levels. The diversified, banking, finance, manufacturing and leisure sectors saw market activity," John Keells Stockbrokers said in a note to investors.
Analysts said they expect shares to rise after results of the central bank's weekly treasury bill auction last Wednesday showed yields fell between 23 and 34 basis points, with the benchmark 91-day treasury bill yield falling for the first time since July 8.
However, investors stayed on the sidelines as some banks offered higher yields for fixed-income assets, they said.
The yield held steady on Tuesday at the weekly auction.
Foreign investors who are net sellers of 2.7 billion rupees worth of shares so far this year, were net buyers of 96.8 million rupees worth of equities on Tuesday.
Turnover stood at 323.8 million rupees ($2.24 million), less than half of this year's daily average of 747.2 million rupees.
Shares of Sri Lanka Telecom Plc rose 1.37 percent while Lanka ORIX Leasing Company Plc gained 4.55 percent.
Shares of Ceylon Tobacco Company Plc rose 0.65 percent while Asian Hotels Properties Plc was up 3.66 percent and biggest listed lender Commercial Bank of Ceylon Plc gained 0.79 percent. ($1 = 144.8000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)