The benchmark index of the Dhaka Stock Exchange (DSE) fell to a one-month low on Sunday as jittery investors continued selling amid growing political concerns.
Market analysts said investor sentiment had already been fragile following the merger of five banks and the move to liquidate nine non-bank financial institutions. Fresh political violence linked to the death of Sharif Osman Hadi, a youth leader of the July uprising, further dented confidence.
"Uncertainty has left investors jittery, with many fearing that the situation could worsen further, affecting the already struggling market," Md Sajedul Islam, the newly elected DSE director, told the Financial Express over the phone.
Alongside lingering uncertainties, a limited supply of investable securities has also contributed to the gloomy sentiment, said Islam, who is also managing director of Shyamol Equity Management.
Not a single company has been listed through an initial public offering (IPO) in the past 18 months, a rare occurrence in the country's capital market history. In the absence of fresh listings and amid weak corporate performance, institutional and foreign investors have remained reluctant to inject fresh funds for the long term.
The market opened sharply lower on Sunday, with the prime index shedding 42 points within the first 20 minutes of trading. However, bargain hunters showed renewed interest in beaten-down stocks in the final hour.
The DSE's prime index eventually closed at 4,826, down 5 points or 0.10 per cent, marking its lowest level since November 17 this year.
The market capitalisation of the DSE has declined by Tk 72 billion over the past month as selling pressure intensified, reflecting investors' efforts to protect already strained portfolios.
Blue-chip stocks also saw notable corrections during the period. Except for Eastern Bank and Prime Bank, all blue-chip shares recorded losses ranging from 2 per cent to 15 per cent in the past month.
Investor sentiment remained largely subdued due to uncertainties surrounding the market outlook amid ongoing economic and political tensions, Islam added.
The DS30 index, comprising 30 leading companies, dropped 6 points to close at 1,853, while the DSES index, which tracks Shariah-compliant stocks, shed 2 points to end at 999.
Market liquidity stayed weak, with total turnover slipping below Tk 3 billion to Tk 2.93 billion, compared to Tk 3.03 billion in the previous session.
Despite the downturn, gainers outnumbered losers. Of the 388 issues traded, 161 advanced, 157 declined, and 70 remained unchanged on the DSE floor.
Rahima Food Industries emerged as the most-traded stock, with shares worth Tk 126 million changing hands following news that the company had signed a contract with City Group to produce City Edible Oil.
The Chittagong Stock Exchange also closed lower, with its All Shares Price Index (CASPI) falling 63 points to 13,561 and the Selective Categories Index (CSCX) losing 38 points to settle at 8,365.
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