DSEX dips below 6300-mark on selling spree in major stocks

Stocks suffered big losses on Sunday as risk-averse investors opted to liquidate their holdings to avoid further erosion of their portfolios.
The market faced selling pressure from the very beginning of the trading session, primarily due to price fall of some large-cap and trendy stocks amid a lack of clear direction, market operators said.
Investors' confidence remained shaky in absence of a major market trigger, prompting them to encash assets given an opportunity instead of taking long-term positions in equities.
Sea Pearl Beach Resorts, Emerald Oil Industries, Unique Hotel & Resorts, Fu-Wang Food, and Olympic Industries jointly accounted for half of the day's index fall.
Moreover, multinational companies, such as Berger Paints, Marico and LafargeHolcim suffered major price decline, wiping out recent price appreciations.
As a result, the prime index of the Dhaka Stock Exchange went down 21.34 points to settle at 6,286. The DSEX lost more than 31 points in the past two trading days.
The recent rise in interest rate and increasing inflation hurt investors' sentiment, said Md. Shakil Rizvi, managing director of Shakil Rizvi Stock Limited.
There is a possibility that the interest rate would go up further, he said, adding that if the interest rate increases, it will hurt the stock market investment.
However, he said, the recent price surge of some stocks prompted risk-averse investors to grab short-term profits.
According to a market analysis by EBL Securities, the equity indices saw a major setback led by a heavy sell pressure in major stocks.
"The cautious investors opted to liquidate their holdings as they expected a probable shift in market momentum."
Of the 300 issues traded, 131 closed lower, 33 higher and 136 issues remained unchanged on the DSE trading floor.
However, section investors continued to chase selective small-cap stocks, particularly life insurance stocks in anticipation of short-term gains, said the stockbroker.
The market has been bearish since the floor price was imposed more than a year ago, with some periodic upward movements that failed to sustain amid a confidence crisis.
Analysts say the prevailing floor price discourages investors, including the institutional ones, to put money in stocks. Uncertain economic outlook may be another reason as to why fresh investments are not coming in.
That compelled investors to focus on short-term bets, with their confidence in the market almost exhausted.
Two other indices also ended lower. The DS30 index, which consists of blue-chip companies, shed 8.74 points to 2,128, and the DSES index, which represents Shariah-based companies, fell 5.47 points to 1,364.
Turnover, a crucial indicator of the market, also dropped 24 per cent to Tk 5.36 billion from the previous day.
Investors were mostly active in the general insurance sector, which captured 27 per cent of the day's total turnover, followed by the food & allied (17 per cent) and the life insurance (14 per cent) sectors.
Small-cap Fu-Wang Food kept its dominance in the turnover chart with shares worth Tk 563 million changing hands, followed by Meghna Life Insurance, Rupali Life Insurance Company, Sea Pearl Beach Resort & Spa and Paramount Insurance Company.
Rupali Insurance was the day's top gainer, posting a 9.90 per cent rise, while Fu Wang Food was the worst loser, shedding 9.44 per cent.
Most of the sectors suffered losses with the travel & leisure experiencing the highest correction of 5.60 per cent as the sector heavyweight Sea Pearl Beach Resort plunged 8.56 per cent. It was followed by the IT sector with 1.80 per cent correction and the paper with 1.30 per cent erosion.
On the other hand, mutual funds and life insurance posted moderate gains.
The Chittagong Stock Exchange (CSE) ended lower, with the CSE All Share Price Index (CASPI) losing 56 points to settle at 18,596 and the Selective Categories Index (CSCX) shedding 33 points to close at 11,118.
Of the issues traded, 79 declined, 25 advanced and 69 issues remained unchanged on the CSE.
The port city's bourse traded 2.24 million shares and mutual fund units with a turnover volume of Tk 125.51 million.

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