COLOMBO Jan 14 (Reuters) - Sri Lankan share index fell more than 1.6 percent to more than 18-month low on Thursday due to rising yields that led investors to shift towards risk-free assets such as government securities amid global worries, brokers said.

The main stock index ended 1.65 percent, or 108.17 points weaker, at 6,446.20, its lowest close since July 2, 2014. The bourse had lost 4.93 percent so far this year as of Wednesday's close.

"The market is falling way too fast with the continued foreign selling and talk of big foreign funds selling Sri Lankan shares due to global volatility," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

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"Investors are of the view that they will likely see lower prices and are awaiting the psychological barrier of 6,000 mark. But we feel there is a possibility of small rebound with the huge downturn we have seen," he said.

Stockbrokers said some foreign funds have already started selling blue chips including the market heavyweight John Keells Holdings and lender Commercial Bank of Ceylon .

The bourse dipped further into an over sold territory on Thursday with the 14-day relative strength index at 16.689 points versus Wednesday's 20.874, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

The turnover was at 978.7 million rupees ($6.81 million).

Foreign investors were net buyers fore the first time in four sessions on Thursday due to a block deal, traders said.

They bought a net 56.6 million rupees worth of equities on Thursday. But they have been net sellers of 2.21 billion rupees worth of equities so far this year, compared with 4.43 billion rupees of outflow in 2015.

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Analysts said local investors are worried of more monetary tightening after the central bank raised commercial banks' statutory reserve ratio by 150 basis points with effect from Jan. 16.

The yield on 91-day t-bill rose 40 basis points to an over three-month high of 6.78 percent in three weekly auctions since the Dec. 30 monetary policy announcement.

Shares in Sri Lanka Telecom Plc fell 8.33 percent while Commercial Bank of Ceylon lost 2.91 percent, dragging the overall index. Distillers Company of Sri Lanka fell 3.79 percent while John Keells Holdings Plc fell 1.73 percent.

Markets will be closed for Hindu religious holiday on Friday. Trading will resume on Monday. ($1 = 143.8000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez)