Stocks on downward spiral as market reacts to rising interest

FE Report | Published: September 08, 2024 21:55:47

The broad index of the Dhaka Stock Exchange (DSE) on Sunday experienced a sharp decline extending the losing streak for five consecutive sessions as a majority of the listed securities lost prices.
Despite having a positive start, the DSEX failed to stay in the green zone as most of the blue chip stocks suffered correction.
The Dhaka bourse opened the day's session positively and continued an upward trend for more than an hour. Later, sellers became active on the trading floor taking the advantage of initial positive momentum.
The DSEX finally closed the week's first session with a loss of 0.86 per cent or 49.33 points to close at 5679 points. It shed a total of 150 points or 2.57 per cent in the last five sessions.
Md. Ashequr Rahman, managing director of Midway Securities, said the market plunged in reaction to the latest policy rate hike and tight liquidity in money markets.
Due to irrational measures imposed by the previous commission, traders and speculators had put money into stocks that experienced unexpected rallies. Those stocks with fewer shares were easy to manipulate. While fraudsters artificially drove up prices of the stocks, many others joined the rallies in hopes of quick gains.
The securities regulator's irrational measures included floor price and a 3 per cent lower circuit breaker.
Now, a transition is being observed in trading dynamics from low float, underperforming stocks to blue-chip stocks, such as Grameenphone and Square pharma.
"The trades are unwinding and its impact is being observed on the market," Mr Rahman added.
Of the 30 blue chip stocks, 21 declined, five advanced and the remaining four were unchanged. That's why the DS30 index declined 0.66 per cent or 14.16 points to close at 2100 points.
Of the market leaders having significant influence on the broad index, BRAC Bank, Beximco Pharma, Renata, and Grameenphone were on the chart of the index movers.
On the other hand, British American Tobacco Bangladesh Company (BATBC), Square Pharmaceuticals, IFIC Bank and Robi Axiata were on the chart of index draggers.
All sectors except for jute and cement saw price erosion on the DSE, leading to a sharp loss in the broad index.
Of the major sectors, the price correction experienced by engineering, fuel & power and insurers mainly intensified the Sunday's market fall.
Of the 397 issues traded on Sunday, 64 advanced, 289 declined and 44 were unchanged. The DSE posted a turnover of Tk 6.78 billion, 0.57 per cent up from the previous session.
National Tea Company was the number one gainer with a rise of 8.74 per cent while Rupali Life Insurance was the day's worst loser after declining 9.95 per cent.
mufazzal.fe@gmail.com