The prime index of the Dhaka Stock Exchange (DSE) tumbled to nearly four-month low, as investors continued to dump their holdings to escape further losses.
The DSEX, the prime index of the Dhaka Stock Exchange, slumped nearly 31 points or 0.48 per cent to settle at 6,257. It was the lowest level of DSEX since April 24 this year.
The DSEX has lost 110 points in a month since its recent peak on July 16.
The market has been in bear grip for more than a year since the stock market regulator imposed the floor price. Buyers have shown reluctance to buy stocks even at the lowest price set.
There have been some periodic upward movements which failed to sustain amid the confidence crisis.
Investors mostly focused on short-term bets as the prolonged volatility and weakened strength of the market have dampened their confidence.
The prevailing floor price discourages investors to put fresh bets on stocks, said Richard D' Rozario, president of DSE Brokers Association of Bangladesh.
Investors were selling off shares fearing further fall in stock prices as no immediate solution to the current depressed situation is in the horizon, he said.
The central bank's latest circular on deduction of source tax from interest income against term deposit of mutual funds negatively impacted the already bearish market, said a stockbroker.
The Bangladesh Bank in a circular on Sunday directed scheduled banks to follow a clarification by the National Board of Revenue, according to which source tax will be deducted on the interest income of mutual funds from associated fixed deposits with the banks.
The DS30 Index, which comprises blue-chip companies, plummeted 14 points to 2,124 while the DSES index, which represents Shariah-based companies, shed more than 6 points to 1,357.
Stocks sank due to massive selloffs from the very beginning of the trading session as investors were rattled about the market outlook, said EBL Securities.
The stockbroker said the risk-averse investors continued to offload holdings to safeguard their funds amid economic uncertainties.
Turnover, a crucial market indicator, dropped to Tk 4.13 billion, down from Tk 4.25 billion the day before.
Investors were mostly active in the food sector, capturing 18.5 per cent of the day's total turnover, followed by general insurance and pharmaceuticals.
Most of the traded stocks saw price erosion, as out of 390 issues traded, 148 witnessed price fall, 19 closed higher and 223 issues remained unchanged on the DSE trading floor.
Small-cap companies kept their dominance in the turnover chart with Fu-Wang Food being the most-traded stock with shares worth Tk 237 million changing hands, followed by Sonali Paper and Gemini Sea Food.
Central Pharma, another low-cap company, was the day's top gainer, registering an increase of 2.65 per cent while Khan Brother PP Woven bag Industries was the worst loser, shedding 8.78 per cent.
The Chittagong Stock Exchange (CSE) saw a sharp decline too, with the CSE All Share Price Index (CASPI) shedding 65 points to settle at 18,503 and the Selective Categories Index (CSCX) losing 39 points to close at 11,061.
Of the issues traded, 79 declined, 18 advanced and 54 issues remained unchanged on the CSE.
The port city's bourse traded 2.17 million shares and mutual fund units with a turnover volume of Tk 123 million.
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