Stocks tumbled on Tuesday as risk-averse investors opted for booking short-term profits on sector-specific shares amid soaring inflation and in the absence of a major trigger in the market.
Inflation hit a fresh decade-high of 9.94 per cent in May, while some investors preferred to book profits, anticipating a tough time ahead because of the ongoing energy crisis.
Although the market showed positive momentum initially, the indices failed to sustain their gains after mid-session amid heavy selling pressure on major sector stocks.
The selloff in a number of previously trendy stocks dragged the prime index of the Dhaka Stock Exchange down by 40.10 points to settle at 6,316. The index also lost 9.84 points the previous day.
The price fall of large-cap stocks such as LafargeHolcim, Sea Pearl Beach Resorts, BSRM Steels, Navana Pharma and Unique Hotel & Resorts mostly contributed to the market plunge.
Lack of confidence among investors owing to economic uncertainty at home and abroad and higher inflation have made investors cautious, market insiders say.
Moreover, there is no new incentive and no discussion about the stock market in the proposed budget, which makes stakeholders disappointed.
The market turnover also dropped 13.5 per cent to Tk 10.87 billion from the previous day’s seven-month high turnover of Tk 12.57 billion.
The DS30 Index, which consists of blue-chip companies, also dropped 9.47 points to 2,188, and the DSES Index, which represents Shariah-based companies, fell 10 points to 1372.
Mid-cap stocks dominated the turnover list, with Associated Oxygen becoming the turnover leader with Tk 529 million changing hands, followed by Intraco Refueling Station, Meghna Life Insurance and RD Foods.
The majority of the stocks lost prices as 157 closed lower, 25 closed higher, and 182 remained unchanged on the DSE floor.
The Chittagong Stock Exchange (CSE) also slumped, with the CSE All Share Price Index (CASPI) losing 109 points to settle at 18,667 and its Selective Categories Index (CSCX) shedding 65 points to close at 11,169.