The island nation's main share index closed 1.51 or 91.94 points down at 5,995.92 its lowest since Nov. 28.
The bourse saw a net foreign outflow of 233.1 million rupees on Monday, for a total of 1.66 billion over the last 10 days. Thus far in 2011, offshore investors have sold 18 billion, and 26.4 billion in 2010.
"Foreign selling on large-cap stocks and year-end selling pressure pulled the market down," a stockbroker said on condition of anonymity.
Others brokers said the resignation of the SEC head also prompted some institutional and foreign investors to cash in
On Thursday, SEC Chairperson Indrani Sugathadasa stepped down "to uphold her principles," barely a month after her deputy was moved amid broker complaints about tougher regulation.
The day's turnover was 1.58 billion Sri Lanka rupees ($13.87 million), less than last year's average of 2.4 billion and this
year's 2.4 billion.
Top conglomerate John Keells Holdings PLC, which saw foreign selling of 1.1 million shares, fell 3.63 percent to 162.10
rupees, while Hatton National Bank PLC fell 3.33 percent to 145 rupees after a foreign investor offloaded 54,000 shares.
Total volume was 35.7 million shares, against a five-day average of 81.9 million. The 30-day and 90-day average trading
volumes were 60 million and 102.2 million. Last year's daily average was 67.9 million