The benchmark equity index stumbled in the holiday-shortened week, following a strong rebound the previous week as ongoing macroeconomic uncertainty continues to keep investors on the sidelines, contributing to the market's lackluster performance.
Market analysts noted that investors remained largely reluctant to make new investments in stocks due to the bleak market outlook amid confidence crisis and shied away from taking positions in equities considering the market's waning momentum.
Investors remained on edge, closely watching the market in the absence of any significant triggers to spark a recovery from its volatile state.
The volatile investor sentiment was further exacerbated by the recent imposition of big fines on several market manipulators and rising interest rates in the banking sector.
Even the disbursement of Tk 30 billion sovereign-guaranteed loan to Investment Corporation of Bangladesh last week failed to boost investor confidence.
Consequently, the market witnessed a dominant sell pressure and the first three trading days ended lower while the last day of the week finished in the green. The market remained closed on Wednesday on the occasion of Christmas Day.
Despite some buying activity in sector-specific issues in the final session of the week, the benchmark index ended the week in negative territory.
DSEX, the key index of the Dhaka Stock Exchange (DSE), settled the week more than 37 points or 0.71 per cent lower at 5,184, after gaining 116 points in the week before.
In its weekly analysis, EBL Securities said the market witnessed another lackluster week with the benchmark index failing to stay afloat in positive territory amid wavering confidence across the trading floor.
"The indices remained under stress for the majority of the sessions this week with widespread sell-offs from cautious investors due to subdued confidence," said the stockbroker.
Md Sajedul Islam, managing director of Shyamol Equity Management, said the gloomy macroeconomic outlook weakened investor confidence while general investors preferred to hold cash to meet high living costs.
The rising interest rates, which made fixed-income instruments more lucrative compared to stock market return, drove away investors from the equity market, said Mr Islam.
Moreover, investors usually keep away from investing in the year-end.
However, Mr Islam added that the low turnover was also a sign of investors' unwillingness in selling shares at the prevailing low price level, which is good for the market.
The blue-chip DS30 index, a group of 30 prominent companies, also dropped 11 points to 1,927 while the DSES index, which represents Shariah-based companies, saw a fractional loss of 0.72 point to 1,166.
Price erosion of selective stocks such as Square Pharma, Beximco Pharma, National Bank, Jamuna Oil Industries, Acme Laboratories and Grameenphone jointly accounted for a 32-point fall in the key index.
Square Pharma alone contributed to a 16-point fall of the key index this week as its stock plunged 2.8 per cent to close at Tk 216.6 on Thursday.
Beximco Pharma also fell more than 4 per cent this week, contributing to a 5-point fall of the key index.
As the investors were mostly reluctant to make fresh investments, daily turnover tumbled to a five-month low on December 24.
Subsequently, the total turnover stood at Tk 11.74 billion this week, down from Tk 14.92 billion in the previous week.
Accordingly, the average daily turnover stood at Tk 2.94 billion, down more than 21 per cent from the previous week's average of Tk 3.73 billion.
Investors were mostly active in the pharma sector, which accounted for 20.4 per cent of the week's total turnover, followed by banking (10.3 per cent) and textile (10.2 per cent).
Losers took a strong lead over gainers. Out of 396 issues traded, 250 closed lower, 101 ended higher and 45 remained unchanged on the DSE trading floor.
Orion Infusion topped the turnover chart, with shares worth Tk 824 million changing hands, closely followed by Robi Axiata, Bangladesh Spinning Corporation, Beacon Pharma and GPH Ispat.
Most of the large-cap sectors witnessed negative performance. The non-bank financial institutions experienced the highest loss of 3.6 per cent, followed by power with 2.5 per cent, pharmaceutical 1.08 per cent, telecom 0.96 per cent, and engineering 0.30 per cent.
The Chittagong Stock Exchange (CSE) also ended lower, with CSE All Share Price Index (CASPI) losing 87 points to settle at 14,435 and its Selective Categories Index (CSCX) shedding 50 points to close at 8,794.
The port-city bourse traded 93 million shares and mutual fund units with a turnover value of Tk 3.88 billion.
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