COLOMBO, March 23 (Reuters) - Sri Lankan shares ended weaker on Wednesday, slipping from a near three-week high hit in the previous session, as foreign investors exited risk assets amid concerns over the country's economic growth and rising bond yields.
Sri Lanka's economy is expected to grow 5.3 percent in 2016, but analysts say tight monetary and fiscal policies may curb growth. The $82.2-billion economy expanded at a sluggish 2.5 percent in the December quarter.
The benchmark share index, which gained 0.3 percent in early trade, ended down 0.25 percent, or 15.07 points, at 6,073.50.
The index closed at its highest since March 1 on Monday. Markets were closed on Tuesday for a public holiday.
Foreign investors sold a net 305.5 million rupees ($2.10 million) worth of shares on Wednesday, extending the net foreign outflow so far this year to 2.09 billion rupees worth shares.
Investors preferred fixed interest-rate bearing assets over shares due to a rise in yields on treasury bills, which are hovering at more than two-year highs, and on an unexpected interest rate hike by the central bank in mid-February, dealers said.
Yields on t-bills jumped by 62-90 basis points at a weekly auction on Monday to hit 29-month highs.
"The slow downward trend is continuing. A block deal pushed up the turnover," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.
Turnover stood at 1.27 billion rupees on Wednesday, well above this year's daily average of 796.9 million rupees.
Shares in Carson Cumberbatch Plc fell 10.87 percent, while Commercial Leasing and Finance Plc fell 7.69 percent. Distilleries Company of Sri Lanka Plc climbed 1.61 percent. ($1 = 145.8000 Sri Lankan rupees) (Reporting by Shihar Aneez and Ranga Sirilal; Editing by Biju Dwarakanath)