The benchmark Colombo All Share Price Index (ASPI) closed down 0.72 percent (18.07 points) to end at 2,506.85, while the Milanka index of liquid stocks fell 1.
17 percent (33.67 points) to close at 2,841.10, according to provisional stock exchange data.
Turnover was 270.0 million rupees.
On Wednesday there were net foreign outflows worth 7.
4 million rupees, with foreign investors buying 40.
1 million worth shares and selling shares valued at 47.5 million rupees, brokers said.
"The price dip of index heavy weight stocks such as John Keells Holdins (JKH), Sri Lanka Telecom (SLT) and Dialog has drawn the market into negative territory mainly due to poor corporate earnings," Thakshila Hulangamuwa, vice president at Asha Phillip Securities said.
"The market has fairly adjusted to the peace dividend and anything above this level will be determined by good corporate results."
Index heavy conglomerate JKH closed at 129.75 rupees, down 3.00, while Commercial Bank of Ceylon closed at 142.75 rupees, down 25 cents.
Brokers said 3.75 million Dialog Telekom shares changed hands.
Celco Dialog Telekom, a unit of Telekom Malaysia closed at 5.75 rupees, down 25 cents, while Sri Lanka's largest fixed line operator SLT closed at 41.50 rupees, down 1.75
Hatton National Bank non-voting closed at 58.25 rupees, down 1.00, while Chevron Lubricants Lanka, a unit of U S based energy giant Chevron closed at 131.
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00 rupees, down 25 cents.
Ceylon Tobacco Company, the Sri Lankan unit of British American Tobacco closed at 140.00 rupees, down 1.25, while DFCC Bank closed at 137.00 rupees, down 2.00.
Retailer favorite Lanka Cement closed at 31.50 rupees, down 25 cents, while National Development Bank closed at 166.75 rupees, up 75 cents.