COLOMBO, July 7 (Reuters) - Sri Lankan shares rose for a second straight session on Thursday and posted their highest close in more than one week, as foreign investors bought into banking and diversified stocks.

Overseas investors, who have offloaded shares worth a net 5.81 billion rupees ($40 million) so far this year, bought equities worth a net 466.96 million rupees on Thursday.

Turnover rose to the highest level since May 27, at 960.9 million rupees, well above this year's daily average of 733.8 million rupees.

ADVERTISEMENT

The selling pressure seems to have cleared off and positive signs are getting in to the market slowly, said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

"Investors are waiting to see Prime Minister Ranil Wickremesinghe's restructuring plans in August," Mathew added.

The benchmark Colombo stock index ended 0.48 percent higher at 6,310.69, its highest close since June 27.

Sri Lankan markets were closed on Wednesday for a public holiday.

ADVERTISEMENT

Shares have been on a downward trend recently, hitting their lowest close since April 7 on Monday after falling 10 out of 11 sessions, on worries over a capital gains tax on stocks, high interest rates and policy uncertainty.

Shares of Lanka ORIX Leasing Co Plc gained 0.87 percent, while those of Cargills (Ceylon) Plc and Hatton National Bank Plc rose 5.93 percent and 2 percent, respectively. Conglomerate John Keells Holdings Plc added 0.36 percent. ($1 = 145.2500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)