The prime index of the Dhaka bourse shed more than 300 points in just six days as jittery investors kept their sell-offs, fearing further fall of stock prices amid persistent economic worries.
The market witnessed free fall from the beginning of the session on Monday as shaky investors went on heavy sell-offs, dragging the key index down 5,400-mark soon after the trading began. Bargain hunters then showed some interest in beaten-down stocks, helping the market recover almost half of the initial losses.
The DSEX, the prime index of the Dhaka Stock Exchange, finally slid more than 37 points or 0.69 per cent to settle at 5,393, a fresh 37-month low since April 20, 2021.
Substantial price erosion of selective large-cap stocks, such as BAT Bangladesh, Beximco Pharma, Beacon Pharma, Prime Bank, and Kohinoor Chemicals made major contributions to the index fall. They jointly wiped out 16 points of the DSEX.
The DSEX lost 943 points or 15 per cent since the removal of floor price in January this year while the market value of the DSE shed Tk 968 billion.
"The panic-stricken investors shy away from taking positions in equities and continue to trim their exposure to escape further losses owing to the prolonged subdued market sentiment," said EBL Securities.
Sellers continued their dominance across the trading floor, which caused a majority of stocks to extend their losses while many hit the 3 per cent lower circuit breaker without sufficient buyers, said the stockbroker.
The Bangladesh Securities and Exchange Commission (BSEC) on April 24 reduced the lower limit circuit breaker to 3 per cent from 10 per cent to slow the index fall. That has hardly led to any positive results.
Market operators said investors had been suffering a confidence crisis for long while lingering economic uncertainties and the country's macroeconomic cues hit investor sentiment.
The investor sentiment worsened following the recent policy rate increase of 50 basis points amid monetary tightening while the news of possible capital gain tax over Tk 4 million exacerbated the market situation.
Meanwhile, Prof Dr. Hafiz Md. Hasan Babu, chairman of the DSE, on Monday requested the chairman of the National Board of Revenue (NBR) not to impose capital gains tax, considering the interests of investors and the capital market.
The blue chip index DS30, a group of 30 prominent companies, lost more than 9 points to 1938 while the DSES Index, which represents Shariah-based companies, shed 11 points to 1,180 on Monday.
Turnover, a crucial indicator of the market, stood at Tk 5.61 billion, 37 per cent up from the previous day.
All the sectors faced selling pressure, leading to the price erosion of more than 71 per cent stocks. Out of the 389 issues traded, 278 declined, 81 advanced and 30 remained unchanged.
The Chittagong Stock Exchange (CSE) also extended the losing streak with the CSE All Share Price Index - CASPI -shedding 132 points to settle at 15,605 and the Selective Categories Index - CSCX -losing 79 points to 9,393.
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