COLOMBO, June 2 (Reuters) - Sri Lankan shares edged down on Thursday, posting their lowest close in nearly five weeks, as rising interest rates weighed on risky assets, while lack of new catalysts also dented sentiment.

Treasury bill yields rose between 4 and 35 basis points to near three-year highs in two weekly auctions through Wednesday despite the central bank leaving key policy rates steady for a third straight month on May 20.

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The benchmark Colombo stock index ended 0.29 percent, or 18.91 points, weaker at 6,523.84, its lowest close since April 29. It has fallen 0.72 percent in the four sessions through Thursday after declining 0.94 percent last week.

"There is no market-moving news and the market is moving news," a stockbroker said.

Stockbrokers said a rise in interest rates could be detrimental to risky assets if they jumped beyond 12 percent. The average prime lending rate (AWPR) edged up 15 basis points to 10.15 percent in the week ended May 27.

Analysts said market sentiment remained weak as investors were waiting for catalysts such as a big foreign direct investment or initial public offering or inflows from the International Monetary Fund (IMF).

Investors are also concerned about foreign investment outflows, they added, with overseas investors offloading a net 5.59 billion rupees ($37.68 million) worth of equities so far this year. Foreign investors bought shares worth a net 26.1 million rupees on Thursday.

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Turnover stood at 671.9 million rupees, well below this year's daily average of around 791.9 million rupees.

Shares in Nestle Lanka Plc fell 1.95 percent, while those in Bukit Darah dropped 5.31 percent. ($1 = 148.3500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)