New Zealand beat Sri Lanka by 38 runs in their Champions Trophy Group B match at the Wanderers stadium Sunday.

Batting first, the Kiwis posted an impressive 315 for seven and then restricted Sri Lanka to 277 to ensure a victory and keep alive their chances of qualifying for the final four.

Daniel Vettori's side had lost their opening match to South Africa.

They play England next at the Wanderers on Tuesday.

Chasing an improbable 316 to win, Sri Lanka kept losing wickets at crucial junctures and that proved to be the bane of their innings.

Mahela Jayawardene made a valiant 77 off 85 balls, his knock inclusive of six hits to the fence and two over it.

But with 97 runs still required, Vettori bowled Jayawardene to end Sri Lanka's hopes of a win.

Nuwan Kulasekara used to the long handle to good effect towards the end.

The tail-ender scored his maiden fifty, an unbeaten 57, but in the end it wasn't enough to ensure Sri Lanka a win.

Kulasekara's 56-ball knock included two boundaries and four huge sixes. 

Earlier, Jesse Ryder battled through a groin strain for his 74 at the top before a rearguard fightback lifted New Zealand to an imposing 315 for seven in the group B match.

Ryder and fellow opener Brendon McCullum (46) combined for a 125-run opening stand in 20 overs before an all too familiar middle-order collapse pulled the Kiwis back.

Ryder batted with a runner after picking up a groin strain in the fifth over and though the burly left-hander was in discomfort, he didn't let it hamper his fluent stroke-play.

The 25-year-old struck 10 fours and a six in his 58-ball knock, while McCullum's 72-ball innings was studded with five boundaries.

However, the injury ensured Ryder will miss the rest of the tournament.

From being 125 for no loss in 20 overs, the Black caps lost half their side by the 30th but Martin Guptill (66) and skipper Daniel Vettori (48) played saviours with their valiant efforts down the order.

Had it not been for Vettori and Guptill, New Zealand were looking down the barrel yet again.

The duo put on 69 runs for the sixth wicket.

Guptill's 76-ball knock was laced with three boundaries and a six while Vettori's 44-ball knock included four hits to the fence and one over it.