Stocks plunge on panic selling

The Dhaka Stock Exchange faced another round of battering on panic selling triggered by rumours about the possible action against manipulators and the resignation of the securities regulator boss.

The market, however, got off to a flying start in the morning and the benchmark DSEX index added over 90 points before succumbing to the heavy selling pressure after midday hit by the rumours.

The index displayed high volatility as the anxious investors offloaded stocks, erasing all the gains and pulling the index down steeply. On Tuesday, the benchmark index closed its seventh successive session in the red with a decrease of 76 points or over 1 per cent to settle at 7,020—the lowest since September 2 this year when it was 6,981. In seven sessions, it shed almost 5 per cent or 350 points.

“Investors were spooked by the rumour, dragging down the market,” said a top broker.

The market has been under pressure for a week as rising communal tension and economic sentiment turned less bullish amid rising inflation, taka depreciation, and falling remittance inflow.

Volumes remained thin compared with the activity in recent times. The turnover stood at Tk 1,682 crore, hovering below Tk 2,000 crore since October 7.

The market fell as the panicky investors dumped their holdings over the possible action against the share price manipulators, said an investor.

The risk-averse investors opted for liquidating their position to escape further losses on their portfolios, he added.

A rumour that the Bangladesh Securities and Exchange Commission chairman resigned that also came out of the blue in the market, said another investor.

However, EBL Securities, in its market analysis, said, “Sell-off was witnessed across sectoral issues as investors are offloading shares based on speculations to reduce losses. Many investors rushed to participate in the hyped-up insurance stocks as the sectors exerted substantial gain amidst the price correction in the market.”

Participation on the bourse, however, advanced while the total turnover has increased by 20.74 per cent driven by sale pressure, it said. On the sectoral front, life insurance accounted for 18.31 per cent, bank 15.74 per cent, and pharmaceuticals 10.30 per cent of the total turnover.

Cement, tannery, and services took a hit of most selling pressure while life insurance and general insurance flexed their muscle amid the bloodbath. Out of the top ten gainers, seven came from the insurance sector.

The market fell across the board as out of the 376 issues traded, 87 advanced, 254 declined, and 35 remained unchanged.