The All Share Price Index closed up 0.29 percent (7.15 points) at 2,480.60 while the Milanka rose 0.54 percent (15.93 points) to 2,969.46. Turnover was 194 million rupees.
Lanka Cement rose 3.85 percent or 50 cents to 13.50 rupees and was the day's most actively traded stock with 801,000 shares changing hands.
The trading followed comments published over the weekend by construction minister Rajitha Senaratne that the government wanted to give India's Birla group the deal to revive a cement plant in northern Jaffna owned by Lanka Cement.
He said a team from the Birla group is to visit Jaffna to inspect the site. The team had been scheduled to come last month.
Indices were pushed up by gains in Commercial Bank which rose 3.78 percent or 4.75 to 130.25 rupees, John Keells Holdings which went up 1.
50 percent or 1.50 to 101.75 rupees and Sri Lanka Telecom which ended up 25 cents at 47.25.
Dialog Telekom fell 1.75 percent or 25 cents to 14 rupees.
Stock brokers have said trading is likely to remain choppy in the weeks ahead with bouts of buying broken by profit taking.
Sentiment remained weak as adverse economic conditions like high inflation and interest rates are seen eroding company profitability.
SC Securities said in its weekly report that the Colombo bourse gained 4.36 percent last week with the benchmark ASPI climbing103.
35 points while the more sensitive MPI rose by 140.36 points.
This was mainly because of buying interest on some of the blue chips.