Stocks experienced another major setback this week, with the key index tumbling below the 5,300 mark for the first time in two and a half months, as jittery investors ramped up selloffs to avoid further erosion of their portfolios.
The market remained sell-dominant throughout the week, extending its losing streak for the fourth consecutive week.
Opening the week with a free fall, the market saw all four sessions of this week end lower, with investors, particularly retail ones, engaging in panic selling.
DSEX, the prime index of the Dhaka Stock Exchange (DSE), finally settled at 5,258, losing more than 164 points or 3.03 per cent over the week before. The DSEX lost 476 points in the past four straight weeks.
The worried investors continued to release their holdings after noticing that the heavyweight issues, including mutational companies, kept falling in the past few weeks, putting pressure on the indices further.
Five large-cap stocks -- Islami Bank, Brac Bank, British American Tobacco, Renata, and Beacon Pharma -- together accounted for one-fourth of the index's decline during the week, according to EBL Securities.
This week, Tk 52 billion was wiped out from the market capitalization of the DSE, which now stands at Tk 6,691 billion. Over the past four consecutive weeks, the market capitalisation has declined by a total of Tk 242 billion.
The market-cap is calculated by multiplying the total number of a company's outstanding shares by the current market price.
The blue-chip DS30 index, a group of 30 prominent companies, also lost 54 points to close at 1,930 while the DSES index, which represents Shariah-based companies, shed 32 points to 1,174.
Stocks plunged further this week to deepen its free fall as investors' pessimistic sentiment regarding the market momentum continued to persist, commented EBL Securities, in its weekly analysis.
"Investors preferred to trim their equity exposures and adopted a wait-and-see approach amid uncertainties surrounding earnings declarations for June-ending companies," said the stockbroker.
Moreover, macroeconomic and regulatory uncertainties acted as negative catalysts that ignited the selling spree, allowing the bears to retain control for a prolonged period, it added.
A series of strict regulatory measures, policy changes, and rising interest rates have dampened investor sentiment, contributing to the ongoing market plunge, said a leading broker, declining to be named.
The market has remained bearish over the past two months, with the benchmark index extending its downward spiral as the market fails to recover from the enduring pessimism due to the dampened confidence of investors amidst an uncertain market outlook.
Furthermore, rising interest rates, a slowdown in business activities, and anticipation of disappointing corporate earnings have all contributed to the downturn in the market.
The potential interest rate hikes following the Bangladesh Bank's decision to raise the policy rate also dampened investor confidence.
The latest policy rate hike of 50 basis points to 9.5 per cent, amid a tightened monetary space, has intensified concerns among stock investors.
Turnover, a crucial indicator of the market, tumbled to Tk 12.72 billion this week, as against Tk 14.67 billion in the week before.
Subsequently, the average daily turnover reached Tk 3.18 billion, down 13 per cent from the previous week's average of Tk 3.67 billion.
Investors were mostly active in the banking sector, which accounted for 20.4 per cent of the week's total turnover, followed by the pharma sector (16.5 per cent) and IT (11.3 per cent).
More than 87 per cent traded stocks saw price erosion, as out of 396 issues traded, 345 declined, 34 advanced and 17 remained unchanged.
All the sectors faced selling pressures and closed in the red. Among the major sectors, engineering saw the highest correction of 5.8 per cent. It was followed by non-bank financial institutions, power, food, banking and telecom.
Agni Systems was the most-traded stock with shares worth Tk 940 million changing hands, closely followed by Lovello Ice-Cream, Techno Drug, Brac bank and NRB Bank.
The Chittagong Stock Exchange (CSE) also tumbled, with the CSE All Share Price Index (CASPI) shedding 314 points to settle at 14,821 and its Selective Categories Index (CSCX) losing 180 points to close at 9,012.
The port-city bourse traded 11.02 million shares and mutual fund units with turnover value of Tk 302 million.
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