The main share index fell 2.9 percent, or 170.14 points, to 5,753.20, its lowest close since early April.
Top conglomerate John Keells plummeted 10.2 percent to 208.00 rupees a share after saying it would raise 39.83 billion rupees ($299.14 million) from selling rights and warrants to help fund an $850 million resort project.
'The market came down with panic selling of John Keells,' said one stockbroker who asked not to be identified.
Analysts said investors also were cautious over further falls in the rupee and a weak earnings outlook.
The local currency hit an all-time low on Wednesday amid panic buying by importers, dealers said, but the central bank governor said the moves were exaggerated by thin volumes and insisted the currency would stabilise soon.
Foreign investors were net buyers of 202.6 rupees worth of shares, extending net inflows so far this year to 18.35 billion rupees worth of shares.
Turnover was 694.2 million rupees, well below this year's daily average of about 912.6 million rupees.
(Reporting by Ranga Sirilal; Editing by Kim Coghill)
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