* Retail buying in blue chips amid thin trade * Foreign investors buy 30,000 Keells shares * Rupee flat; cenbank sells $12 mln to defend COLOMBO, Dec 7 (Reuters) - Sri Lanka's stock market climbed on Wednesday in thin trade as investors cautiously bought blue chips that have lost value, while many investors held off in anticipation of possible regulatory changes. The island nation's main share index rose 0.67 percent or 40.14 points to 6,028.79, from its lowest since Nov. 28. Retail buyers snapped up Dialog Axiata PLC and Sampath Bank PLC, while foreign investors bought market heavyweight John Keells Holdings PLC. Keells jumped 4.94 percent to 172.10 rupees as foreign investors bought 30,308 shares, while Dialog ended 1.28 percent firmer at 7.90 rupees and Sampath gained 0.5 percent to 202 rupees. But the bourse saw a net foreign outflow of 70.9 million rupees on Wednesday with offshore investors selling 500,200 shares in Lanka Walltile PLC, which ended flat at 92.10 rupees. Foreign investors have sold 18.1 billion thus far in 2011, and a record 26.4 billion in 2010. The day's turnover was 831.2 million Sri Lanka rupees ($7.30 million), well below last year's average of 2.4 billion and this year's 2.4 billion. Total volume was 35.5 million shares, against a five-day average of 58.9 million. The 30-day and 90-day average trading volumes were 57.2 million and 100.6 million. Last year's daily average was 67.9 million. The bourse has fallen 11.13 percent since Oct. 1. It is Asia's 13th-best performer with a year-to-date loss of 9.15 percent after being at the top until June. It gave Asia's best returns in 2009 and 2010. On Wednesday, the bourse was in neutral territory with the 14-day relative strength index at 39.6, above the lower neutral range of 30. Losers outnumbered gainers by 96 to 88, Thomson Reuters data showed. The rupee closed flat at 113.89/90 rupees a dollar for an eleventh straight day. The central bank on Wednesday sold around $12 million to defend the currency, dealers said, extending its total dollar sales to around $260 million since the 3 percent devaluation on Nov. 22. On Wednesday the central bank raised its benchmark 91-day T-bill rate by 8 basis points to a 20-month high. . FACTORS TO WATCH: - Investors' moods after the devaluation - The potential for imported inflation post-devaluation - The reserve cost of defending the new rupee rate DATA Colombo Stock Exchange: Stock Market Volume (Shares) Current Volume Average Volume 30 Days 35,470,550 57,239,581 Yield and Price of Sri Lanka's sovereign bonds: Maturing year Tenure amount Reuters yield 2012 5-yr $500 mln 6.606-6.309 2014 5-yr $500 mln 5.457-5.117 2020 10-yr $1,000 mln 6.1001-5.9537 2021 10-yr $1,000 mln 6.2625-6.1235 * For Sri Lankan treasury securities benchmarks and data, please click and * For interbank lending rate or call money rate or * For secondary market rates, please see. ($1 = 113.9150 Sri Lanka rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Bryson Hull)

Source