Sri Lankan shares hit 1-month closing low; foreign selling on

COLOMBO, Feb 10 (Reuters) - Sri Lankan shares fell for a fifth straight session on Monday and closed at their lowest level in a month, led by blue chips while foreign investors continued to sell risky assets as part of a selloff in emerging markets. 

The main stock index fell 0.51 percent, or 31.45 points, to 6,110.27, its lowest close since Jan. 10. It has lost 2.2 percent in the last five sessions. 

Foreign investors sold net 301.7 million rupees ($2.31 million) worth of shares on Monday, extending the foreign outflow to 3.72 billion rupees in the last three sessions. 

The bourse has seen 2.33 billion rupees of foreign outflow so far in 2014, after enjoying a net inflow of 22.88 billion rupees last year. 

"The emerging market selloff still continues and we see some major foreign funds are leaving," said a stockbroker. 

"But when the foreign selling dries off, the market will rebound as interest rates in fixed assets are very low." 

Shares in Dialog Axiata fell 2.13 percent to 9.20 rupees, while market heavyweight Ceylon Tobacco Company Plc , which posted a 27.2 percent rise in its December-quarter earnings, fell 0.43 percent to 1,247 rupees. 

Conglomerate Aitken Spence outperformed the market with a gain of 1.28 percent at 102.50 rupees after it posted a 54 percent rise in its December-quarter earnings. 

Analysts said investors have been waiting for directions from December-quarter earnings and an upcoming UNHRC session in March where Sri Lanka is facing a US-sponsored resolution for alleged human rights violations. 

Stockbrokers said investors will shrug off political risks from renewed pressure by the United States to bring a fresh resolution against Sri Lanka at the UNHRC meeting in March, because the market had been expecting the worst. 

They said local investors are active in the market after interest rates on treasury bills eased to multi-year lows, making fixed-income assets unattractive. 

The index has risen 3.34 percent so far this year, following a 4.8 percent gain in 2013. It fell in the previous two years. 

The day's turnover was 1.32 billion rupees, well above last year's daily average of about 828.4 million rupees. 

($1 = 130.7500 Sri Lanka rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)