COLOMBO, Sept 7 (Reuters) - Sri Lanka's benchmark index ended lower in lean trading on Wednesday, dragged by blue chips to a near one-month closing low, as investors largely stayed on the sidelines, stockbrokers said.

The benchmark Colombo stock index ended 0.25 percent lower at 6,507.98, its lowest since Aug. 8. The bourse had fallen 0.2 percent last week, posting its second straight weekly loss.

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Foreign investors, who have sold shares worth net 2.74 billion rupees ($18.86 million) so far this year, were net buyers of shares worth 32.9 million rupees on Wednesday.

Turnover stood at 500.4 million rupees, around two-third of this year's daily average of 752.4 million rupees.

"It was a dull day. Today, it was mainly the retail activity and we didn't see aggressive buying or selling in the market even though there were opportunities in the market," said Yohan Samarakkody, head of research, SC Securities (Pvt) Ltd.

"Market is stagnant and investors are awaiting some direction."

After the market close, the central bank's weekly treasury bill auction results showed rates fell 23 to 34 basis points. The benchmark 91-day treasury bill rates fell for the first time since July 8.

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Dealers said the reduction in rates will help attract investors into stocks.

The fall was led by shares of Sri Lanka Telecom Plc and Distillers Sri Lanka Plc, which fell as much as 1.9 percent and 2.5 percent, respectively. ($1 = 145.2500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez)