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The market opened with a massive fall on Monday as the panicked investors continued to sell-off their holdings amid growing concerns over the economic uncertainties.
The investors have been suffering a crisis of confidence for long and the recent free-fall of the index mounted the crisis among them, said a leading broker.
Following the previous five days’ major fall, DSEX, the prime index of the Dhaka Stock Exchange (DSE), went down by more than 57 points or 1.05 per cent to 5,374, after the first hour of trading at 11:00 am, when the report was filed.
Price erosion of selective large-cap stocks such as Power Grid, Brac Bank, BAT Bangladesh, Walton, Robi and United Power contributed most to the market plunge.
Two other indices also saw major setbacks at opening with the DS30 index, comprising blue chips, losing 18 points to 1930 while the Shariah Index (DSES) fell 13 points to 1,178 till then.
Turnover, another important indicator of the market, amounted to Tk 2.07 billion after the first hour of trading.
The investors trimmed their exposure to the stock market owing to lingering economic uncertainties fuelled by inflation pressure and a declining forex reserve while possible capital gain tax over Tk 4 million in the next budget exacerbated the market sentiment.
Besides, the investor sentiment hit a fresh blow due to potential interest rate hikes following the latest policy rate increase by 50 basis points amid a tightened money market.
The rising interest rates already turned fixed-income instruments more lucrative compared to the equity market, while a further rate hike is likely to worsen the situation.
Of the issues traded till then, 291 declined, 55 advanced, and 28 issues remained unchanged on the DSE trading floor till then.
Lovello Ice-cream was the most traded stock till then with shares worth Tk 150 million changing hands, closely followed by eGeneration, Orion Pharma and Asiatic Lab.
The Chittagong Stock Exchange also saw a sharp fall till then with its All Shares Price Index (CASPI)—losing 80 points to stand at 15,657 the Selective Categories Index – CSCX shed 49 points to 9422, also at 11:00 am.