COLOMBO, July 11 (Reuters) - Sri Lankan shares rose for a fourth straight session on Monday and posted their highest close in more than two weeks, as foreign investors continued to buy into battered banking and diversified stocks after recent losses.

Overseas investors, who have offloaded shares worth a net 5.29 billion Sri Lankan rupees ($36.48 million) so far this year, bought equities worth a net 344.5 million rupees on Monday.

Foreign investors have bought a net 1 billion rupees worth shares in the four straight sessions through Monday.

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Turnover was at 878.8 million rupees, more than this year's daily average of 737.3 million rupees.

The benchmark Colombo stock index ended 0.09 percent higher at 6,372.24, its highest close since June 23. It gained 1.26 percent last week, the first weekly gain in four.

"Some positive sentiment is building up with the sovereign bond yield is coming down compared to the initial price guidance," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

Sri Lanka has received orders exceeding $4.5 billion for a two-tranche bond it launched on Monday forcing the yields lower whit the final guidance for the 5.5-year tranche around 5.8 percent (+/-5BPS) lower than initial guidance which was in the area of 6.125 percent.

For the 10-year bond final guidance was around 6.875 percent (+/-5BPS) lower than the initial guidance of around 7.125 percent.

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Shares have been on a downward trend recently, hitting their lowest close since April 7 on July 4 after falling 10 out of 11 sessions, on worries over a capital gains tax on stocks, high interest rates and policy uncertainty.

Shares of biggest listed lender Commercial Bank of Ceylon Plc rose 1.85 percent, while those conglomerate John Keells Holdings Plc rose 0.28 percent. ($1 = 145.0000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez Editing by Jeremy Gaunt)