The benchmark index of the Dhaka Stock Exchange (DSE) plunged to 6,190 points, the lowest in more than three months, as investors were reluctant to put fresh bets on stocks amid new concerns over the market outlook following a price hike of bulk electricity.
Sell-offs continued across the bourse since investors focused on protecting their funds from the ailing market, EBL Securities said.
Investors decided to remain on the sidelines as their willingness to take long-term positions in equities has faltered due to dismal corporate earnings declarations by a majority of companies, it added.
The 20 per cent hike in the bulk electricity price has magnified investors' concerns about the sluggish economy as that may further impact the future earnings of the companies listed with the stock market.
DSEX lost 24.25 points, or 0.39 per cent, to reach its lowest since August 14 this year. It shed about 75 points in the last two days.
The turnover on the prime bourse dropped to four-month low of Tk 3.52 billion since July 19, except for the reduced trading session on October 24 for a technical glitch.
The market has been struggling since the beginning of Russia-Ukraine war in February. The ordeal has been exacerbated by the fear of a possible economic depression, said a merchant banker, proffering anonymity.
Institutional investors followed a 'wait-and-see' strategy while individual investors were not confident enough to inject fresh funds, driving the market turnover down to below Tk 4.0 billion, he said.
A handful of stocks were active on the trading floor in the last few weeks while the majority of stocks remained stuck at the floor for a shortage of potential buyers, including large-cap stocks, such as Grameenphone, Walton, Square Pharma, British American Tobacco, Robi, United Power, Renata and Beximco.
The floor price mechanism prevents investors' capital erosion for a short run but barely relieves retail investors' sufferings as almost 80 per cent of the securities are stagnant at the floor, said the merchant banker.
"Many investors could not sell their holdings even in an emergency due to the lack of buyers," he said.
Since the opportunity to liquidate securities has been narrowed down, investors feel discouraged to inject fresh funds into stocks, said EBL Securities.
On July 28 this year, the stock market regulator expanded the price movement restriction for all stocks, the floor calculated by their average prices from the preceding five days, to stop the index from cascading down.
The growing economic worries, dismal earnings disclosures of most listed companies coupled with rumors of liquidity shortage in the banking sector hurt investors' sentiment.
"The negative sentiments among the investors came from the decline of first quarter corporate earnings alongside the fears of a worsening macroeconomic situation in the coming months," said International Leasing Securities, in its regular market analysis.
The latest earnings declarations failed to meet the investors' expectations.
Some investors have been enduring the pain of heavy losses in their portfolios and cannot get out of it due to the floor price restriction, said the stockbroker.
Genex Infosys -- the largest business process outsourcing provider -tumbled after its stock soared 75 per cent in a month following the news of its deal signing with the National Board of Revenue.
The IT firm's stock plunged 11.71 per cent to close at Tk 96.50 on Monday after it peaked at Tk 166 nearly two weeks ago.
However, Genex Infosys kept its dominance on the turnover list with shares of Tk 479 million changing hands, followed by Orion Pharma (Tk 240 million), Navana Pharma (Tk 193 million), Eastern Housing (Tk 152 million) and Bashundhara Paper Mills (Tk 149 million).
Beximco, Orion Pharma, Genex Infosys, Bangladesh Shipping Corporation, Eastern Housing and Beacon Pharmaceuticals dominated the turnover chart in the past few months.
The pharma, engineering and IT sectors dominated the turnover chart in the last few months on the prime bourse.
The IT sector accounted for 23 per cent of the day's total turnover on Monday, followed by pharma 21 per cent and life insurance 10 per cent.
The newly-listed Chartered Life Insurance was the day's top gainer; soaring 9.80 per cent further to close at Tk 49.30 while Aamra Network was the day's worst loser, losing 12 per cent to close at Tk 46.10.
DSEX eroded 565 points or 8.36 per cent since January 1 this year. Between January 1 and November 21, DSEX climbed up to 7,105 points on January 20 while it sank to its lowest at 5,980 on July 28.
The Chittagong Stock Exchange (CSE) also ended lower with its All Share Price Index - CASPI -shedding 61 points to settle at 18,382 and the Selective Categories Index - CSCX losing 38 points to close at 11,014.
The port city's bourse traded 3.21 million shares and mutual fund units with turnover value of Tk 131 million.