The country's benchmark stock index closed 0.64% down at 5,897.26.

The index is down about 2.56% so far this year.

The stock market had a turnover of 682.7 million rupees ($3.87 million), just above this year's daily average of about 639.3 million rupees so far. Last year's daily average came in at 834 million rupees.

Foreign investors sold a net 169.7 million rupees worth of shares on Thursday, but they have been net buyers of 626.4 million rupees worth of equities so far this year, according to index data.

Shares of biggest listed lender Commercial Bank of Ceylon Plc  fell 3.01%, Hatton National Bank Plc declined 2.7%, conglomerate John Keells Holdings Plc ended 0.7% weaker, and Ceylinco Insurance Plc closed 4.74% down.

Meanwhile, the currency slipped for a fourth straight session and ended weaker at 176.50/60 per dollar compared with Wednesday's close of 176.30/45.

However, the rupee is up 3.5% so far this year.

The central bank left key interest rates unchanged on July 11 as expected, after cutting them in May to support the economy as tourism and investment plummeted in the wake of deadly suicide bombings in April.

Foreign investors sold a net 3.74 billion rupees worth of government securities in the week ended July 24, extending the  year-to-date net foreign outflow to 22.19 billion rupees, central bank data showed.