Stocks extended the losing streak for a six straight session on Monday as jittery investors continued to dump their holdings to avoid further erosion of their portfolio.
The market fell further as uncertainty among investors stemming from recent adjustments in the criteria for downgrading companies to the 'Z' category dampened their confidence, said market operators.
The stock market regulator downgraded 22 low-profile companies to the 'Z' category on Sunday, leading to a selling pressure in the market. Of the 22 companies, Safko Spinning, Khulna Printing and Alltex Industries topped the losers' list.
On Monday, the market saw flat momentum until mid-session as investors remained active on both sides of the trading fence, while sellers ended up on the dominant side by the end of the session.
The DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), finally went down more than 24 points to settle at 6,259. The DSEX shed 188 points in the past six trading days.
Major index draggers were Beacon Pharma, Robi Axiata, Beximco Pharma, Shahjalal Bank, Orion Infusion and Bangladesh Submarine Cable Company as they jointly contributed 20 points fall of the DSEX.
"Most investors opted to bag profit as many stocks saw significant price jump after floor price removal," said Md Sajedul Islam, managing director of Shyamol Equity Management.
This is a positive thing because when investors make profit, they get the confidence to invest more in the future, said Mr Islam, also former senior vice president of DSE Brokers Association of Bangladesh.
According to EBL Securities, the prevailing volatility in the market has faded the reinstated investors' optimism and prompted risk-averse investors to liquidate their holdings.
The DSES index, which represents Shariah-based companies, fell 7.51 points to 1,361, while the DS30 Index, which consists of blue-chip companies, gained 2 points to 2,131.
Turnover, the crucial indicator of the market, dropped to Tk 8.19 billion, which was 11 per cent lower from Tk 9.25 billion the day before.
The pharmaceutical sector kept its dominance on the turnover chart, capturing 18 per cent of the day's total turnover, followed by engineering (10 per cent) and general insurance (9.6 per cent).
Most major sectors faced price correction with general insurance saw the highest loss of 1.70 per cent, closely followed by engineering, telecom, life insurance and pharmaceuticals.
Losers took a strong lead over the gainers, as out of 394 issues traded, 245 saw price erosion, 97 witnessed price appreciation and 52 remained unchanged on the DSE trading floor.
Orion Infusion became the most traded stocks, with shares worth Tk 419 million changing hands, followed by newly listed Best Holdings (Tk 363 million), Fu-Wang Ceramics (Tk 297 million), Aftab Automobiles (Tk 232 million) and Monno Fabrics (Tk 218 million).
Monospool Paper and Paper Processing witnessed significant price erosion, losing 31 per cent and 21 per cent respectively, due to price adjustment, after merger with their associate companies.
The Chittagong Stock Exchange also ended lower with its All Shares Price Index (CASPI) -- losing 96 points to close at 17,990 and the Selective Categories Index (CSCX) shed 57 points to close at 10,774.
Of the issues traded, 161 declined, 66 advanced, and 21 issues remained unchanged on the CSE.
The port city bourse traded 6.39 million shares and mutual fund units with a turnover value of Tk 193 million.
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