The main stock index closed 0.26 percent, or 15.33 points, weaker at 5,809.15, its lowest level since Oct. 2.
President Mahinda Rajapaksa, who is also the country's finance minister, is to present the 2014 budget proposals on Thursday.
Shares in Ceylon Tobacco Company PLC fell 0.89 percent to 1,060.00 rupees, but trading volume was very thin.
'The market is expecting an increase in taxes because the government revenue is lower,' a stockbroker said on condition of anonymity.
The bourse has been sluggish due to concerns over a drop in September-quarter earnings. Many listed firms are expected to release their quarterly earnings this month.
The day's turnover was 603.24 million rupees ($4.60 million), lower than this year's daily average of 857.2 million rupees.
Foreign investors were net buyers of 264.5 million rupees of shares on Tuesday, extending the year-to-date net foreign inflow to 22.88 billion rupees worth of shares.
($1 = 131.1500 Sri Lanka rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)
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