The benchmark share index was up 0.13 percent, or 8.13 points, at 6,065.92 at 0735 GMT.

"Nothing much is happening. Overall, everything is very dull with holidays in-between and investors are worried over the uncertainties," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

Markets will be closed on Tuesday and Friday this week for holidays.

Sri Lanka will raise its value-added tax and reintroduce capital gains tax to break out of a debt trap, ahead of talks on a $1.5-billion loan it is seeking from the International Monetary Fund.

Analysts said a lack of clarity on capital gains tax also weighed on sentiment as the market is still uncertain on the capital tax percentage.

Investors preferred fixed-interest-rate-bearing assets over shares due to a rise in yields on treasury bills, which are hovering at two-year highs, and on the central bank's unexpected interest rate hike in mid February, dealers said.

Sri Lanka's economy is expected to grow 5.3 percent in 2016, data from the state statistics office showed, but analysts say tight monetary and fiscal policies may curb its growth.

The $82.2-billion economy expanded at a sluggish 2.5 percent in the December quarter, down from an upwardly revised 5.6 percent in the previous quarter.

Analysts and economists worry slower growth could reduce corporate earnings of some listed firms.

Turnover stood at 330.2 million rupees ($2.27 million).

The rupee traded weaker, currency dealers said. One-week rupee forwards, which act as a proxy for the spot currency, traded at 145.80/85 per dollar at 0738 GMT, compared with Friday's close of 145.55/65.

The spot currency did not trade below 143.90, which is seen as the central bank's desired level. ($1 = 145.2000 Sri Lankan rupees)

(reuters.com)