COLOMBO Jan 4 (Reuters) - Sri Lankan shares fell on Monday, after closing at their highest level in over a month in the previous session, led by financial stocks on concerns that the new budget proposals would hit their earnings.

The day's turnover stood at 1.07 billion rupees ($7.5 million), more than double the average daily turnover of 412.3 million rupees in the final two weeks of December, helped by block deals in Singer Industries Plc.

The main stock index fell 0.39 percent, or 26.88 points, to close at 6,867.62, slipping from its highest close since Dec. 1 hit on Thursday.

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The market was closed on Friday for the New Year holiday.

"Banking sector is down as investors are expecting the new tax structure from the budget to hit banking profitability," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

"Retail and institutional investors were silent and nobody is willing to take a risk and enter the market," he said.

The index fell 5.5 percent in 2015, Thomson Reuters data showed. In terms of U.S. dollar value, Sri Lanka's market capitalisation fell 13.9 percent, but it performed better than the other stock index in Asia such as Malaysia, Thailand , Indonesia and Singapore.

Foreign investors sold a net 878.1 million rupees worth of equities on Monday. They sold a net 4.43 billion rupees worth of equities in 2015, compared to a net foreign inflow of 22.07 billion rupees previous year.

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Shares in Ceylinco Insurance Plc fell 4.8 percent, while top lender Commercial Bank of Ceylon fell 0.9 percent.

Singer Industries, which accounted for about 62 percent of the day's turnover, fell 6.3 percent.

Diversified shares also fell, with Aitken Spence Plc and John Keells Holdings Plc losing 5.9 percent and 0.5 percent respectively. ($1 = 143.6000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anand Basu)