The main share index edged down 0.09 percent or 5.12 points to 5,626.77, its lowest since Dec. 28.
Foreign investors acquired a net 281.95 million rupees ($2.21 million) worth of shares, extending the year-to-date net foreign inflow to 601.1 million rupees.
The day's turnover was 602.76 million rupees, half this year's daily average of 1.04 billion rupees.
Stockbrokers said retail investors were concerned over a possible reverse in the trend of declining interest rates after the International Monetary Fund last month cautioned Sri Lanka over inflationary risks.
The market has fallen 3.5 percent in thin volume since the IMF on Feb. 13 said Sri Lanka was facing slow growth, high inflation and lower tax revenue risks.
Analysts said retailers were also worried about the effect of allegations Sri Lanka faces at the U.N. Human Rights Council in Geneva over the conduct of its military in the final stages of the 2009 defeat of Tamil Tiger separatists.
The rupee ended steady at 127.42/48 to the dollar. Currency dealers said they expected downward pressure on currency owing to rising imports ahead of the April new year festival season.
($1 = 127.3500 Sri Lanka rupees)
(Reporting by Ranga Sirilal and Shihar Aneez)
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