COLOMBO, March 31 (Reuters) - Sri Lankan shares firmed up on Thursday led by large caps on fiscal year-end buying, but closed nearly 12 percent lower in the March quarter as rising interest rates dented investor appetite for risk assets, brokers said.

The benchmark share index ended 0.51 percent higher, or up 30.89 points at 6,071.88. It fell 11.9 percent in the quarter ended Thursday.

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"The market is up on year-end buying," said Reshan Kurukulasuriya, Chief Operating Officer at Richard Pieris Securities Pvt Ltd, referring to the end of financial year for many listed firms including banks.

"It was due to window-dressing for the end of the financial year, and we don't expect much activities in April due to the festival holidays."

Yields on treasury bills increased between 47 and 74 basis points at the weekly auction on Wednesday despite the central bank keeping key rates steady at its policy review on Tuesday.

Investors are likely to shift investments to fixed assets if market interest rates continue to rise, brokers said.

Shares in Carson Cumberbatch Plc climbed 7.06 percent, while Commercial Bank of Ceylon Plc gained 1.62 percent and Ceylon Tobacco Company Plc rose 0.71 percent.

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Turnover was 690.9 million rupees ($4.76 million), less than this year's daily average of 773.4 million rupees.

Foreign investors sold a net 38.99 million rupees ($268,434) worth of shares on Thursday, extending the year to date net foreign outflow to 1.99 billion rupees worth shares. ($1 = 145.2500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)