Stocks witnessed yet another bearish session Monday, extending the losing streak for the second consecutive sessions, as risk-averse investors continued their selling spree ahead of monetary policy announcement.
Market operators said the ongoing pessimism coupled with upcoming monetary policy statement (MPS) kept investors mostly inactive, taking the key index below 6,100-mark again.
"Ahead of the monetary policy announcement for second half of FY 2018, many investors remained cautious and preferred to be on the sidelines to watch next direction of the market," said an analyst at a leading brokerage firm.
The heavyweight banking sector's issues continued to slump. A total of 26 banking issues closed lower. Among the banks, Mercantile Bank faced the highest correction of 5.74 per cent, followed by ICB Islamic Bank with 4.61 per cent and Prime Bank 4.06 per cent.
The analyst noted that as the news broke that the central bank would tighten the credit to deposit ratios for banks, in order to stop any potential liquidity crisis; it had an adverse reaction on the banking sector stocks.
The market started on negative note and the downturn continued till end of the session with no sign of reversal. Finally it ended more than 60 points lower.
DSEX, the benchmark index of the DSE, went down by 60 points or 0.98 per cent to settle at more than two months low at 6,059. It was the lowest level of DSEX since October 31, 2017.
According to International Leasing Securities, the market witnessed nosedive for the two consecutive sessions amid anticipation of tight upcoming monetary policy, scheduled to be unveiled by the central bank.
The stockbroker noted that the market fell sharply as investors went on selling binge on issues from banking, non-bank financial institutions, fuel & power and engineering sectors.
The two other indices also ended lower. The DS30 index, comprising blue chips fell 17.63 points or 0.78 per cent to finish at 2,225. The DSE Shariah Index (DSES) also lost 7.93 points or 0.57 per cent to finish at 1,376.
"Stocks witnessed notable price correction for another session as liquidity shortage has made the market lose its vibrancy," commented EBL Securities, in its daily market analysis.
The stockbroker noted that stocks from banking sector continued taking the brunt.
Turnover, the important indicator of the market, stood at Tk 4.06 billion, which was 24 per cent higher than the previous day's seven-and-a-half months' lowest turnover of Tk 3.28 billion.
Chittagong Stock Exchange (CSE) also dipped with its CSE All Share Price Index - CAPSI - shedding 168 points to finish at 18,723.
The Selective Categories Index - CSCX - also fell 101 points to settle at 11,308.
Losers beat gainers as 165 issues closed lower, 34 ended higher and 33 remained unchanged on the CSE.
The port city bourse traded 6.54 million shares and mutual fund units worth more than Tk 177 million in turnover.
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