The Colombo bourse surged yesterday on the war news getting a second wind when news of LTTE leader Prabhakaran’s death filtered in about an hour before the market closed, with the All Share Price Index gaining 123.23 points (6.46%) and the Milanka up by 162.01 points (7.83%) on a turnover of Rs. 1.2 billion, up from Friday’s Rs. 420.2 million.

``The market took off on the war news,’’ Prashan Fernando of Acuity Stockbrokers said. ``Retailers and high net worth investors were chasing mainly the blue chips. When news of Prabhakaran’s death came around 1.30 p.m. there was a renewed burst of activity.’’

Fernando said that all round increases were seen in most stocks. The banking sector and hotels, with the exception of Lighthouse which lost 25 cents, were among the gainers with sentiment ``really strong.’’

``Going forward, macro factors should come to the fore,’’ he said. ``Today’s was the biggest single day gain since January 2006 when it was announced that the government was going for peace talks.’’

JKH was the hot favourite on the trading floor with nearly 4.2 million shares done between Rs. 83 and Rs. 93.50 with the counter gaining Rs. 13.25 to close at Rs. 93.50 generating a turnover of Rs. 390.7 million.

Three minutes after the market opened a big parcel comprising 10% of Asian Alliance Insurance was traded flat at Rs. 50 a share generating a turnover of Rs. 125.2 million. Asian Alliance Insurance is related to Asia Capital whose CEO last week sold off a 26% stake of that company.

``It’s hard to say who bought and who sold,’’ brokers said. ``There are a few people with 10% of Asian Alliance.’’

NDB continued to be a favoured stock with nearly 1.3 million shares done between Rs. 94 and Rs. 98.50 gaining Rs. 4.50 to close at Rs. 96.50, contributing Rs. 121.5 million to turnover.

Commercial Bank too did nicely with over 0.6 million shares done between Rs. 96.25 and Rs. 103, up Rs. 5 to close at Rs. 100 generating a turnover of Rs. 63.2 million while CIC with nearly 0.8 million shares done between Rs. 36.75 and Rs. 38.75 gained Rs. 2 to close at Rs. 38.25 posting a turnover of Rs. 28.7 million.

Aitken Spence was one of yesterday’s biggest gainers, up Rs. 29.25 on 75,900 shares traded between Rs. 345 and Rs. 365 at which price it closed generating Rs. 27.7 million turnover.

Non-voting shares of Tokyo Cement saw nearly 2.6 million shares traded gaining 25 cents to close at Rs. 10.25 while Distilleries, with nearly 0.3 million shares done was up Rs. 6 to close at Rs. 88.