Stocks tumbled Sunday as investors sold shares in bulk amid growing concern over the county's banking sector and ongoing liquidity shortage.
DSEX, the prime index of the DSE, settled at 5,950, shedding nearly 100 points or 1.64 per cent over the previous session.
The banking sector posted the highest correction of 2.80 per cent with prices of 29 banks closed lower, followed by non-bank financial institutions with 2.20 per cent.
Developments in the country's banking sector coupled with growing tension over the final selection of Dhaka bourse's strategic partner kept the investors at bay, analysts claimed.
"The market fell amid growing tension over the final selection of major bourse's strategic partner," DSE Brokers Association (DBA) president Mostaque Ahmed Sadeque told the FE.
He said the Bangladesh Bank governor's latest comments on banking sector's panic and liquidity crisis also kept the investors mostly inactive.
Mr. Sadeque, also managing director of Investment Promotion Services, expressed the optimism however that the market would rebound soon.
Governor Fazle Kabir on Saturday sought the finance minister's intervention to stave off pressure to withdraw government funds from private banks, which has been creating an artificial liquidity crisis and bumping up lending rates.
Analysts said the investors might have considered that the hearsay about withdrawal pressure to be true as the governor sought the finance minister's intervention.
Meanwhile, the Dhaka Stock Exchange (DSE) called its board meeting today. The DSE board is expected to approve the minutes of its previous meeting that had accepted the proposal of a Chinese consortium to be a strategic partner.
"After approving the minutes of the previous board meeting, the DSE will send its proposal to the securities regulator for approval in favour of the qualified Chinese consortium," a board member said, seeking anonymity.
Another consortium, led by National Stock Exchange of India (NSE), was the second highest bidder. But, Bangladesh Securities and Exchange Commission (BSEC) allegedly put pressure on the DSE to consider the NSE-led consortium as the strategic partner.
Khairul Basher Abu Taher Mohammad, secretary general of the Bangladesh Merchant Bankers Association, said profit booking on quick-gaining large-cap stocks pulled the stocks down.
"Investors took position on low-cap issues by selling large-cap stocks for quick-gain, which took a toll on overall market," said Mr Basher, also chief executive officer of MTB Capital.
Bearish sentiment also reflected on the premier bourse as total turnover came down to Tk 4.40 billion, which was 14 per cent lower than the previous day's Tk 5.12 billion.
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