Equity benchmark index slipped back into the red after a single-week break, as concerns over looming macroeconomic pressures prompted jittery investors to offload their holdings to avoid further erosion of their portfolios.
This week, the market witnessed high volatility as retail investors went for panic sales in response to sudden demonstrations by workers at several factories, including some listed ones, on the outskirts of the capital.
If such labour unrest continues, there will be a long-term impact on production and as well as profitability of those listed companies, market operators said.
Moreover, the news of record non-performing loans (NPL) in the banking sector also dampened the investor sentiment, as such a huge volume of NPL poses a 'big threat' to the country's financial sector.
Default loans in the banking system have exceeded Tk 2.0 trillion for the first time, reaching Tk 2.11 trillion, or 12.56 per cent of the total disbursed loans as of June this year. Analysts say this significant level of non-performing loans is impacting the stability and profitability of the banking sector.
Although the week began on a positive note, the market quickly shifted to a selling spree as investors closely monitored market momentum amid ongoing regulatory crackdown on market irregularities.
Stocks that came under the scanner of Bangladesh Securities and Exchange Commission (BSEC) saw sharp price corrections and two of them were top weekly losers.
The regulator formed a five-member panel last week to investigate irregularities in a number of companies, including Beximco Green Sukuk Bond and Sonali Paper.
The team will also investigate any irregularities and share price manipulation of Acme Pesticide, Coppertech Industries, Fortune Shoes, Emerald Oil Industries, Ring Shine Textile and Best Holdings.
In response, these stocks lost between 3 per cent and 16 per cent during the week.
The DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), settled the week almost 76 points or 1.31 per cent lower at 5,728.68, after gaining 104 points in the week before.
"Stocks retreated to losing territory as investors preferred to remain cautious ahead of the earnings declaration season for companies with fiscal years ending in June," said EBL Securities.
The worried investors dumped their holdings after noticing that the heavyweight issues kept falling, putting pressure on the indices.
"The correction was mainly due to profit-taking on stocks that saw significant price appreciation in the last few trading days," said Md. Shakil Rizvi, managing director of Shakil Rizvi Stock Ltd.
Five large-cap stocks such as Brac Bank, Linde Bangladesh, Khan Brothers, Renata and GPH Ispat jointly accounted for a fall of more than 340 points in the DSEX, according to EBL Securities.
The blue-chip DS30 index, a group of 30 prominent companies, fell 10 points to 2,114 while the DSES index, which represents Shariah-based companies, dropped 12 points to 1,229.
The total turnover stood at Tk 39.94 billion this week as against Tk 31.70 billion in the week before.
Accordingly, the average daily turnover stood at Tk 7.99 billion this week, which was 0.80 per cent higher than the previous week's average of Tk 7.92 billion in the week before.
Investors were mostly active in the banking sector, which accounted for 17.5 per cent of total weekly turnover, followed by food (13.7 per cent) and pharmaceuticals (13.5 per cent).
The gainers took a strong lead over the losers as out of 395 issues traded, 311 declined, 76 advanced while 8 issues remained unchanged.
Most of the sectors saw price erosion. Among the major sectors, telecommunications experienced the highest loss of 2.85 per cent, followed by engineering, food, banking, pharma and power.
BRAC Bank became the most-traded, with shares worth Tk 2.07 billion changing hands, closely followed by BAT Bangladesh, Olympic Industries, MJL Bangladesh and Linde Bangladesh.
Linde Bangladesh was the top gainer with a rise of 33.7 per cent, while New Line Clothings was the top loser, shedding 27.3 per cent.
The Chittagong Stock Exchange (CSE) also ended lower with its All Share Price Index (CASPI) losing 142 points to settle at 16,378 and the Selective Categories Index (CSCX) losing 78 points to settle at 9,876.
The port city bourse traded 19.61 million shares and mutual fund units with a turnover volume of Tk 718 million.
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