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Colombo stocks fell three percent when trading opened on Tuesday after the Christmas break, following a weekend of violence in the North and East of the country.
The All Share index plunged below the 2000 mark, as investors scrambled tounload stocks amidst very little buying support.
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Since the peak in mid November, the market has fallen more than 500 points.
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Analysts say investors are jittery after the assassination of Tamil legislator Joseph Pararajasinham at Christmas mid night mass in the East and an earlier rebel attack in the North East, which left more than a dozen sailors dead.
More than an hour after trading commenced the all share was down 3.0 percent(63 points) at 1970 points and the Milanka was down 4.
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0 percent (109 points) at 2543.