The benchmark equity index extended its losing streak for the second straight session on Tuesday, slipping below 5,400-mark, as investors mostly adopted a cautious stance ahead of upcoming earnings season.
Market sentiment remained subdued throughout the day, as institutional and high-net worth investors followed a 'go-slow' strategy amid mixed earnings expectations in the June-closing companies, analysts said.
Rising inflation in September and downward GDP growth forecast by the World Bank for this fiscal year during the trading hours also weighed on investor sentiment, said a leading stockbroker.
Newly released data showed that point-to-point inflation inched up to 8.36 per cent in September, compared to 8.29 per cent in August. Simultaneously, the World Bank revised its GDP growth forecast for the current fiscal year downward to 4.8 per cent, from its previous projection of 4.9 per cent.
Following these developments, most investors chose to stay on the sidelines while some reshuffled their portfolios ahead of earnings declaration, said the stockbroker.
He noted that institutional investors appeared hesitant to inject fresh funds into the market, while retail investors showed a preference for holding onto cash amid growing economic uncertainty.
The day also saw a bout of profit-taking, particularly in stocks that had recently experienced sharp gains, as jittery investors looked to lock in profits.
However, prospects of a policy rate cut amid declining yield rates of the government securities are expected to drive market momentum ahead, he added.
On Tuesday, the yield rates on 2-year government bonds dropped below 10 per cent to 9.44 per cent from 10.17 per cent in the previous bidding, signalling potential easing of interest rates in the money market.
Market indices remained downbeat throughout the session as sellers dominated the trading board while others remained watchful in absence of a decisive catalyst for the market's revival.
The DSEX, the benchmark index of Dhaka Stock Exchange (DSE), finally settled nearly 47 points or 0.86 per cent lower at 5,377.
The DSEX lost almost 71 points while the market-cap shed Tk 64 billion in the past two consecutive sessions.
The blue-chip DS30 index, a group of 30 prominent companies, also lost 24 points to close at 2,065 while the DSES index, which represents Shariah-based companies, shed 10 points to 1,161.
EBL Securities, in its regular market analysis, said that amid the absence of a reviving catalyst for the volatile market, broad-based selling pressure plunged the market indices into negative territory again.
Price fall of selective stocks, including some blue chips such as BRAC Bank, Square Pharma, BAT Bangladesh, City Bank and Grameenphone, dragged the market index down. These five stocks jointly accounted for a 15-point fall in the index.
The turnover stood at Tk 7.87 billion, which was 7 per cent higher than the previous day's turnover of Tk 7.37 billion.
Investors were mostly active in the general insurance sector, which accounted for 13.6 per cent of the day's total turnover, followed by life insurance (11 per cent) and banking sector (9.7 per cent).
Losers outnumbered the gainers, as out of 401 issues traded, 282 saw price correction while 85 others gained and 34 issues remained unchanged on the DSE floor.
All major sectors showed negative performance. The non-bank financial institutions witnessed the highest loss of 1.40 per cent, followed by food with 1.30 per cent, telecommunication 1.20 per cent, banking 1 per cent, power 0.90 per cent, and engineering 0.70 per cent.
Low-cap stocks dominated the turnover chart. CVO petrochemicals Refinery became the most-traded stocks, with shares worth Tk 272 million changing hands, closely followed by Sonali Paper, Rupali Life Insurance, Pragati Insurance and Khan Brothers PP Woven Bag Industries.
The Chittagong Stock Exchange also ended lower, with its All Shares Price Index (CASPI) shedding 107 points to close at 15,082, while the Selective Categories Index (CSCX) fell 58 points to 9,266.
The port city bourse traded 3.67 million shares and mutual fund units with turnover value of Tk 122 million.
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