* Foreigners sell Commercial Bank as chairman quits
    * Foreign outflow in bank of 173 million rupees
    * Central bank sells around $30 mln to defend rupee

    COLOMBO, Dec 29 (Reuters) - Sri Lanka's main share
index ended a four-session winning streak on Thursday as banking
shares came under pressure.
    Foreign investors sold Commercial Bank of Ceylon
for a third day after the resignation of its chairman was
announced.
    Commercial Bank of Ceylon edged down 0.3 percent, resulting
in foreign outflow of 173.4 million Sri Lanka rupees ($1.52
million).
    The island nation's main share index slid 0.07
percent or 4.01 points, to 6,089.38, from a four-week high.
    The central bank kept the rupee currency steady by selling
around $30 million.
    Offshore outflow in the three sessions through Thursday was
1.17 billion rupees, with more than 90 percent of that generated
by Commercial Bank, traders said.
    Commercial Bank, in a statement to the bourse, said chairman
MJC Amarasuriya would resign from the post on Friday.
    Analysts and brokers said the foreign outflow appeared to be
due to a Europe-based fund selling the shares, though they could
not explain its motivation or if the selling was related to the
resignation of Amarasuriya.
    Net offshore selling year-to-date has been 19.04 billion
rupees. Foreigners sold a record 26.4 billion rupees in stocks
in 2010.
    The day's turnover was 678.1 million rupees, far below last
year's average of 2.4 billion and this year's 2.3 billion.
    The market has been looking for an easing of credit limits
imposed by the Securities and Exchange Commission (SEC), which
along with the resignation of the regulator's head and deputy,
and a 3 percent currency devaluation, have dampened the market.
    Any new direction from the new SEC head on credit limits is
expected in January, brokers said.
    Last month, brokers, who complained tougher regulation was
hurting stock market prices, met President Mahinda Rajapaksa to
urge him to intervene in his capacity as finance minister to
revive the slumping bourse.
    The Colombo Stock Exchange has fallen to Asia's 10th-best
performer with a year-to-date loss of 8.24 percent, after being
top in the region until June. It delivered Asia's best returns
in 2009 and 2010.
    The rupee closed flat at 113.89/90 to the dollar for
a 26th straight session with the central bank selling around $30
million to defend it, dealers said.
    On Wednesday, Treasury Secretary PB Jayasundera said Sri
Lanka needs flexible exchange rates and tighter monetary policy
to curb cheap imports that are putting pressure on the country's
balance of payments.
    Yet last week, central bank governor Ajith Nivard Cabraal
told Reuters, it can maintain the rupee rate by selling dollars
from foreign reserves as it expects large inflows in coming
months.
    The bank has spent around $665 million to keep the exchange
rate steady since a 3 percent devaluation on Nov. 21. It spent a
net $1.36 billion in the first nine months of the year to keep
depreciation pressure at bay.
    ($1 = 113.9 Sri Lanka rupees)	

 (Reporting by Shihar Aneez; Editing by David Hulmes)