COLOMBO, June 24 (Reuters) - Sri Lanka rupee rose on Monday buoyed by hopes of dollar inflows into two sovereign bonds launched earlier in the day, while shares fell for the third straight session to hit a near two-week low on foreign outflows, market sources said. ** The island nation launched the sale of 5-year and 10-year sovereign bonds, a senior government official told Reuters, aiming to tap global capital markets for the second time in three months. ** The currency ended at 176.45/55 per dollar, compared with Friday’s close of 176.70/80, market sources said. The rupee is up 3.4% for the year. ** Analysts, however, still expect the rupee to weaken further as money flows out of stocks and government securities. ** The rupee dropped 16% in 2018 and was one of the worst-performing currencies in Asia. ** Foreign investors bought a net 879.6 million rupees worth of government securities in the week ended June 19, but the island nation’s net foreign outflow was at 20.7 billion rupees so far this year, central bank data showed. ** Meanwhile, Sri Lankan benchmark stock index ended 0.17% weaker at 5,354.53, its lowest closing level since June 11. It fell 0.38% last week and is down 11.53% so far this year. ** Foreigners sold on a net basis for the 10th session out of the last 11, the bourse data showed. ** Sri Lanka’s economy picked up to 3.7% in the first quarter of 2019, government data showed on Wednesday. But investors shrugged off better-than-expected growth as full-year growth is expected to slow after the Easter Sunday attack. ** Sri Lanka is in talks with the Beijing-backed Asian Infrastructure Investment Bank for a $1 billion dollar loan, the finance ministry said. ** The central bank cut its key interest rates on May 31 to support a faltering economy as overall business and consumer confidence slumped following deadly bomb attacks in April.
** Sri Lanka is unlikely to hit its full-year economic growth target of 3-4% following the bombings, junior finance minister Eran Wickramaratne told Reuters last month. A Reuters poll has forecast growth to slump to its lowest in nearly two decades this year. ** Friday’s stock market turnover was 261.5 million rupees ($1.48 million), less than this year’s daily average of about 543.9 million rupees. Last year’s daily average was 834 million rupees. ** Foreign investors sold a net 131 million rupees worth of shares on Monday, extending the year-to-date net foreign outflow to 6.06 billion rupees. ** For a report on global markets, click ** For a report on major currencies, click ($1 = 176.4000 Sri Lankan rupees) (Reporting by Shihar Aneez and Ranga Sirilal; Editing by Rashmi Aich)