COLOMBO Aug 23 (Reuters) - Sri Lankan shares ended marginally higher on Tuesday and posted their highest close in three months, led by financials while turnover hit a 4-1/2-month high on expectations of better economic performance after the government said it would achieve its revenue target for this year.

Tax revenue in the first seven months jumped 23 percent to 769.8 billion rupees from a year earlier, and Finance Minister Ravi Karunanayake is optimistic about the full-year revenue target, his ministry said on Monday.


The benchmark Colombo stock index ended 0.14 percent, or 9.17 points, firmer at 6,603.76, its highest close since May 20.

"Today, it was mostly retail-driven, but the market has slowed down in the last few days with the month-end settlements," said Reshan Kurukulasuriya, chief operating officer of Richard Pieris Securities (Pvt) Ltd.

Turnover stood at 1.81 billion rupees ($12.45 million), its highest since April 1, and well above this year's daily average of around 750.1 million rupees.

Foreign investors sold a net 402.4 million rupees worth of shares, the highest outflow since May 27, and extending the outflow so far this year to 3.62 billion rupees worth of shares.


They are, however, net buyers of 1.03 billion rupees worth of equities so far this month.

Shares of Ceylinco Insurance Plc rose 0.81 percent, while Asiri Hospital Holdings Plc gained 3.55 percent and Cargills (Ceylon) Plc added 0.11 percent. ($1 = 145.4000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)