COLOMBO, Feb 12 (Reuters) - Sri Lankan shares edged down for the fifth straight session on Friday to close at a more than three-week low, in line with weaker regional peers, as investors stayed off risky assets on concerns over rising domestic interest rates.
Asian shares fell for a sixth straight session on Friday as concerns about the health of European banks further threatened a global economy already under strain from falling oil prices and slowdown in China and other emerging markets.
Sri Lanka's main stock index ended 0.5 percent weaker, or down 31.82 points, at 6,283, its lowest close since Jan. 20. It has fallen 1.9 percent on the week.
Foreign investors net bought for the second straight session, purchasing 12.6 million rupees ($87,539) worth shares on Friday, but have net sold 176.1 million rupees worth of equities so far this year.
"Though there are net foreign inflows, blue chips saw net foreign selling and all the major stocks are down due to selling pressure," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.
"Market and investor sentiment are negative at least until we see clear direction."
The key index has fallen 8.9 percent this year through Friday amid a rise in market interest rates.
Yields on t-bills rose between 8 and 17 basis points at a weekly auction on Wednesday, with the 182-day and the 364-day t-bill yields climbing to more than two-year highs, signalling a further rise in market interest rates.
Some investors are shifting to fixed interest rate-bearing assets due to a gradual rise in interest rates, analysts said.
Turnover was 530.9 million rupees, less than this year's daily average of 742.17 million rupees.
Shares of conglomerate John Keells Holdings Plc fell 2.51 percent, while the biggest listed lender Commercial Bank of Ceylon Plc dropped by 1.57 percent and Sri Lanka Telecom Plc fell 1.03 percent. ($1 = 143.9500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)