Sri Lankan shares closed higher on Thursday, aided by gains in industrial and financial stocks, as a surprise 250 basis points cut in key interest rates by the country's central bank boosted investor confidence.

* The CSE All Share index settled up 1.59% at 8,691.61, extending gains to a second straight session.

* Central Bank of Sri Lanka (CBSL) caught markets off-guard by cutting its key rates by 250 basis points on Thursday as inflation slowed at a faster-than-expected pace, signalling that the South Asian nation was emerging from a devastating financial crisis.

* CBSL cut its standing deposit facility rate and standing lending facility rate to 13% and 14%, respectively, from 15.5% and 16.5% previously.

* On the CSE All Share index, Sri Lanka Telecom PLC and Expolanka Holdings PLC were the top gainers, jumping 6.48% and 3.01%, respectively.

* Trading volume rose to 46.8 million shares from 33.9 million shares in the previous session.

* The equity market's turnover rose to 1.34 billion Sri Lankan rupees ($4.21 million) from 348.9 million rupees in the previous session, according to exchange data.

* Foreign investors were net sellers, offloading stocks worth 21.4 million rupees, while domestic investors were net buyers, purchasing shares worth 1.33 billion rupees, the data showed.

* For a report on global markets, click ($1 = 318.0000 Sri Lankan rupees) (Reporting by Ashna Teresa Britto; editing by Eileen Soreng)