* Foreign investors sells $95.6 mln on net basis
* Rupee edges down on importer dollar demand
COLOMBO, Jan 25 (Reuters) - Sri Lanka's stock market fell on Tuesday, after having scaled a record high on Monday, as retail investors booked profits after the recent rally, while the rupee edged down on importer dollar demand.
The island's main share index .CSE closed 0.50 percent or 36.13 points weaker at 7,225.24. It had hit a record closing high of 7,261.37 on Monday after touching a new peak at 7,320.22 points.
It has been Asia's best performer with a 8.88 percent gain so far in 2011 after being the top performer last year with a 96 percent return.
Turnover was 3.3 billion rupees ($29.3 million), more than the last year's daily average of 2.4 billion. Foreign investors were net sellers for 95.6 million rupees' worth shares on Tuesday and they have sold a net 2.4 billion rupees so far this year after selling a record net 26.4 billion rupees in 2010.
The bourse is trading at a forward price-to-earnings (P/E) ratio of 18.2, highest among emerging markets, compared with 12.9 in Asian markets and 11.9 in global emerging markets, Thomson Reuters StarMine data showed. Its 14-day relative strength index is at 80.4, beyond the overbought limit of 70.
The traded share volume was 120.7 million against five-day average of 170.6 million. Last year's daily average volume was 69.2 million.
The rupee LKR= closed weaker at 110.95/111.00 a dollar from Monday's 110.91/95 on sever importer demand for dollars, traders said.
FACTORS TO WATCH:
- Corporate earnings for the December quarter
- Whether a technical correction will bring the bourse down
- If foreign funds buy shares in large volumes
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