The All Share Price Index closed at 2,927.56, up 2.57 percent (73.32 points) while the Milanka Price Index of more liquid stocks closed at 3,313.92, up 2.95 percent (95.04 points).
Turnover was 283.5 million rupees, according to provisional Colombo Stock Exchange statistics.
"There was strong support for the market when the ASI fell below the 2,900 point level," Angelo Ranasinghe, research manager at Bartleet Mallory Stockbrokers said.
Index heavy stock John Keells Holdings closed at 141.
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00 rupees, up 4.00, and Distilleries Company of Sri Lanka, a unit of the unlisted Stassens closed at 93.50 rupees, up 3.50.
Chevron Lubricants Lanka Limited a unit of US based petroleum multinational Chevron closed at 196.75 rupees, up 8.75.
Commercial Bank of Ceylon closed at 114.25 rupees, up 1.75, and Hatton National Bank closed at 164.
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00 rupees, up 1.75.
National Development Bank closed at 178.50 rupees, up 5.50, and Sampath Bank closed at 177.00 rupees, up 3.00.
"The positive macro environment due to the low inflation, low interest rates and stable currency coupled with improved corporate earnings in selected counters will drive the market in the future," Ranasinghe said.
Hotel stocks, Asian Hotels and Properties closed at 72.50 rupees, up 2.75, Pegasus Hotels at 32.75 rupees, up 1.25, Renuka City Hotel at 178.25 rupees, up 3.25, and Royal Palms Beach Hotels at 62.25 rupees, up 4.25.
Retailer favorite Lanka Cement closed at 25.00 rupees, up 1.00, and forestry company Touchwood Investment closed at 83.25 rupees, up 2.00.
Sri Lanka's largest celco Dialog Telekom, a unit of Telekom Malaysia closed at 7.25 rupees, up 25 cents, and fixed line operator Sri Lanka Telecom closed at 43.75 rupees, up 2.50.