The All Share Price Index closed at 4,857.57, up 1.06 percent (51.14 points) while the more liquid Milanka index rose 0.
77 percent (42.05 points), crossing the 5,500 point mark for the first time to close at 5,503.
28.
Turnover was 3.98 billion rupees, according to stock exchange provisional figures.
"The market continued its upswing backed by enhanced investor sentiment," said Sandamalee Jayawickrama, an analyst at Bartleet Mallory Stockbrokers.
"Now that the June quarter earnings reporting season has started we expect investor sentiment to be strong backed by quarterly results expected to be released into the market.
"
Nine crossings or privately negotiated off-the-floor deals in HNB of 4.45 million shares at 300 rupees a share contributed 1.
36 billion rupees or 34 percent of trading turnover.
Hatton National Bank closed at 295 rupees, up five rupees.
A deal of two million shares of Chevron Lubricants Lanka at 165 rupees a share accounted for nine percent of turnover. The share closed at 162.50 rupees, up 75 cents
Hotel Reefcomber was the most actively traded share, closing at five rupees, up 40 cents with almost 22 million shares traded.
Jayawickrama said share prices in the hotel sector remain strong because of anticipation of better earnings ahead of the peak tourism season which coincides with the northern hemisphere winter.
Corrected - Milanka index crossed 5,500 points; HNB up five rupees; Hotel Reefcomber most actively traded.