17 percent (10.03 points) to 5,862.91, while the more liquid Milanka index fell 0.32 percent (15.88 points) to 5,004.55.
Turnover was 534 million rupees, according to stock exchange provisional figures.
Investors punished shares and warrants of Environmental Resources Investments, which last week said it was delaying conversion of February 2012 warrants with others being converted Tuesday.
ERI shares were again the most actively traded and generated the day's biggest turnover.
ERI, the day's fifth biggest loser, fell further to close at 27.50 rupees, down 2.40 with 6.5 million shares done.
ERI's W0002 warrants fell 10 cents to end at 13.90 rupees while W0006 warrants fell 10 cents to close at 14.
20 rupees, and W0003 warrants fell 80 cents to close at 13.60.
The company, which was fined last year for providing misleading information, has said it wants to extend the cut off date of its 2012 warrants from February 03, 2012 to September 6, 2013.
It also recommended extending the expiration date of the warrants from February 24, 2012 to September 26, 2013.
Stock market analysts said the company was trying to buy time with the share price sinking below the February 2012 warrants conversion price of 33 rupees amid speculation its controlling shareholder Lionhart Investments had not taken up its full subscription of warrants.
They said only 34 million new ERI shares had been created by the conversion of its 2011 warrants.
Lionhart Investments, a UK-based fund, has about 80-90 percent of both shares and warrants of ERI.
Index heavyweight John Keells Holdings closed two rupees weaker at 165 rupees with 548,800 shares traded, including the sole crossing or off-market private deal of the day of 150,000 shares at 167 rupees each.