The benchmark Colombo All Share Price Index (ASPI) fell 0.16 percent (4.28 points) to close at 2,603.37 while the Milanka index of liquid stocks gained 0.39 percent (11.47 points) to close at 2,964.21, according to provisional stock exchange data.
Turnover was 855.4 million rupees.
On Tuesday there were net foreign outflows worth 16.8 million rupees, with foreign investors buying 146.5 million worth shares and selling shares valued at 163.3 million rupees, brokers said
"Today's there was heavy market speculation of Merchant Bank taking over The Finance Company, while retailers continued to bet on Environmental Resources Investments," Charuka Suchendra, an analyst at stock brokers Asha Phillip Securities said.
"High valued counters such as John Keells Holdings (JKH), Colombo Dockyard and some banking stocks also grabbed investor attention today."
The Finance Company, a unit of troubled Ceylinco Group, closed at 28.00 rupees, up 4.25 with almost 3.5 million shares traded, while 2.56 million shares of state-owned Merchant Bank of Sri Lanka changed hands. It closed at 23.25 rupees, up 4.00 rupees.
Brokers said 1.76 million Environmental Resources Investments (formerly Walker & Grieg) warrants changed hands. It closed at 28.00 rupees, up 2.00.
Another 2.0 million Environmental Resources Investments warrants changed hands. It closed at 27.25 rupees, up 1.75.
Environmental Resources Investments normal shares closed at 43.00 rupees, up 25 cents with 697,100 shares changing hands.
Confifi Hotels closed at 136.25 rupees, down 3.75, while Kandy Hotels Company closed at 111.00 rupees, down 2.00.
Ceylon Cold Stores, a unit of JKH closed at 149.00 rupees, down 3.00, while Singer Sri Lanka closed at 55.00 rupees, down 1.75.
Serendib Hotels closed at 63.50 rupees, up 2.50, while Lankem Ceylon closed at 35.50 rupees, down 1.25.
Retailer favourite Lanka Cement closed at 33.00 rupees, down 75 cents.
Index heavy JKH closed at 135.75 rupees, up 50 cents with 653,600 shares changing hands today, while Distilleries Company of Sri Lanka, a unit of unlisted Stassens Group closed at 82.25 rupees, down 1.50.
Sri Lanka's largest celco Dialog Telekom closed at 5.75 rupees, down 25 cents, while fixed line operator Sri Lankan Telecom closed at 40.75 rupees, down 1.00.
Ceylon Tobacco Company, a unit of multinational British American Tobacco, closed at 170.25 rupees, down 2.75, while Chevron Lubricants Lanka Limited, a unit US-based oil giant Chevron, closed at 154.50 rupees, up 5.75.
Samapth Bank closed at 144.00 rupees, down 1.25, while National development Bank close at 168.00 rupees, up 1.50.