The main stock index fell 0.18 percent, or 10.97 points, to 6,239.03, slipping from its highest close on Friday since Nov. 11, 2011.
'Retail profit-taking brought the market down on dull trade,' a stockbroker said on condition of anonymity.
The market shrugged off a 50 basis point rate cut by the central bank on Friday, a decision speculated since early April.
On Friday, the central bank cut its key monetary policy rates by 50 basis points before the market opened, following some of its regional peers, to boost economic growth amid subdued demand.
The market had gained about 8 percent through Friday since Treasury Secretary P.B. Jayasundera's remarks on April 9 that interest rates could ease in May-June.
Monday's turnover was 535 million rupees ($4.24 million), half of this year's daily average of 1.02 billion rupees.
Foreign investors were net buyers of 153 million rupees of shares, extending the net foreign inflow this year to 9.75 billion rupees. Last year, the bourse saw a net inflow of $303 million.
The rupee edged down to 126.25/30 per dollar, down from Friday's close of 126.23/28, on importer demand for dollars, currency dealers said. ($1 = 126.2000 Sri Lanka rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Prateek Chatterjee)
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