COLOMBO, Sept 22 (Reuters) - Sri Lankan stocks hit a one-week closing high on Thursday, led by blue chips as investors picked up beaten down counters, even as foreign investor outflow touched a seven-month high, mainly due to selling in shares of National Development Bank.
The benchmark index of the Colombo Stock Exchange ended 0.21 percent higher at 6,464.94, its highest close since Sept.15.
"Index turned green today with sudden buying interest in blue chip counters," said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd. "Buying interest is there mainly in diversified shares."
Foreign investors sold a net 6.38 million shares in National Development Bank, ahead of a change in its top management, Mathew said. NDB ended 1 percent higher.
Foreign outflow hit its highest since Feb. 19 as offshore investors sold a net 867.8 million rupees ($5.95 million) worth of equities on Thursday, extending the year to date net foreign outflow to 2.94 billion rupees worth shares.
Turnover stood at 2.09 billion rupees, more than twice this year's daily average of 752.3 million rupees.
Shares in conglomerate John Keells Holdings Plc rose 0.9 percent, while Ceylon Tobacco Company Plc gained 1.3 percent, driving the overall index higher.
The bourse hit a more than seven-week low on Tuesday as selling pressure on stocks that were expected to take a hit from a proposed tax increase weighed on sentiment. ($1 = 146.0000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)