Stocks suffered a big jolt on Monday as jittery investors dumped their holdings, fearing further erosion of their portfolios.
The latest policy rate hike by a further 50 basis points amid a tightened monetary space fueled concerns among investors regarding the market outlook, said EBL Securities.
Accordingly, the risk-averse investors sold their stakes from the very beginning of the session, leading the core index to nearly 7.5-month low. The index lost 20.15 points from the day before to settle at 6,209.
The market was downbeat throughout the session, with a majority of scrips experiencing corrections due to sell pressure. Investors hardly had any appetite for fresh investments due to the bleak macroeconomic environment and mounting political tensions ahead of the national election.
Sea Pearl Beach Resorts, Fu-Wang Ceramics, Kohinoor Chemical, Western Marine Shipyard, Bangladesh Thai Aluminum, Generation Next, Global Heavy Chemical, Pacific Denims, Olympic Accessories and Fu-Wang Food jointly accounted for one third of the day's index fall.
The recent rise in interest rate hurt investors' sentiment, said Md. Shakil Rizvi, managing director of Shakil Rizvi Stock Limited.
There is a possibility that the interest rate will go up further and if that happens, it will impact stock market investments, added Mr Rizvi.
Of the 290 issues traded, 134 closed lower, 17 higher and 139 issues remained unchanged on the DSE trading floor.
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.
Turnover, a crucial indicator of the market, also dropped 33 per cent to Tk 3.7 billion from the previous day.
Most of the sectors suffered losses with the travel & leisure experiencing the highest correction of 2.60 per cent. It was followed by the general insurance sector with 1.40 per cent correction and the cement with .90 per cent erosion.
The Chittagong Stock Exchange (CSE) ended lower, with the CSE All Share Price Index (CASPI) losing 63.37 points to settle at 18,422 and the Selective Categories Index (CSCX) shedding 39 points to close at 11,015.
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