The key Dhaka index dipped below the "psychological" threshold of 5,000-mark again on Wednesday as investors dumped their holdings to prevent further losses.
DSEX, the prime index of the Dhaka Stock Exchange, lost 20.68 points or 0.41 per cent to settle at six-week low of 4,986. DSEX also fell below 5,000-mark to reach 4,966 on July 22 this year.
The DSEX has lost a cumulative 192 points in the past six straight sessions while it eroded 964 points in since January 24, when the index peaked at 5,950.
The market capitalisation also dropped to Tk 125 billion in six consecutive sessions while it shrank to Tk 475 billion in the past seven and a half months, the DSE data shows.
The slide began when the news emerged that fiscal 2019-2020 budget was passed in parliament on June 30, 2019 without any significant incentive for stocks and the market had hardly rebounded since then.
The government's supportive measures, including redefining the banks' capital market exposure and amending public issues rules, also failed to boost the fund flow.
Market analysts said the lack of investors' confidence, the telecom regulator's wrangling with GrameenPhone, soaring non-performing loans and the government's move to liquidate People's Leasing were behind the latest falloff in stock prices.
Growing concern due to the spat between the telecom regulator and GP over claims of unpaid dues of heavyweight GP that led the investors to sell-off its shares, said a leading broker.
GP, which is the largest company by capital, dropped further by 1.80 per cent, contributing more than 11 points of the index's fall alone on Wednesday, he estimated.
The GP share price plunged more than 30 per cent in the past five months after the Bangladesh Telecommunication Regulatory Commission (BTRC) declared GP to be a significant market power.
The telecom regulator also threatened to cancel the licence of the largest listed company over unpaid audit claims of more than Tk 125.79 billion.
The financial sector is not performing well as investors are suffering from confidence crisis due soaring non-performing loans, which hit the bank stocks hard, said a leading broker.
Falling foreign portfolio investment in the country's capital market also eroded local investors' confidence to put fresh fund into stocks, he added.
Net foreign investment in DSE remained negative for the sixth straight month in August as they bought shares worth Tk 1.77 billion and sold Tk 2.79 billion worth of shares, taking the net position of negative Tk 1.02 billion.
The investors are not confident enough to inject fresh funds into stocks amid a dismal market outlook, Khairul Bashar Abu Taher Mohammed, secretary general of the Bangladesh Merchant Bankers Association (BMBA), told the FE.
Mr Bashar, CEO of the MTB Capital Ltd, said that new investors are staying off the market, selling shares and not returning either as the market lacks direction.
The institutional investors had also maintained a cautious stance due to the ongoing liquidity crunch, he said.
Mr Bashar underscored the need for joint effort of stock market stakeholders to bring back investors' confidence to the market.
Meanwhile, the board of directors of the DSE, Chittagong Stock Exchange and leaders of DSE Brokers Association hold a meeting with the Bangladesh Securities and Exchange Commission today (Thursday).
The meeting will be held at the BSEC office in the capital where they will discuss a range of issues, including the recent market slump, officials said.
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