Stocks continue to slide as budget fails to restore confidence

The stock markets lost further ground on Monday as the budget for the next fiscal year 2022-23 failed to restore investors' confidence.

The benchmark DSEX index of the Dhaka Stock Exchange (PSX) declined 39 points or 0.61 per cent, falling below 6400 barrier. In two days, it lost more than 90 points since the budget was announced.

The market fell across the board as sentiment remained negative in the post-budget sessions, dealers say.

Among other indices, the Shariah-based DSES index dropped 8 points or 0.58 per cent to settle at 1,394, while blue-chip comprising the DS30 index fell 17 points or 0.75 per cent at 2,316.

“Dhaka stocks tumbled on back to back post budget sessions as investors’ sentiment is negative across the bourse after FY 2022-23 budget failed to match up to the expectation of the market participants,” said the EBL Securities in a note.

“Instability of exchange rate and inflation upturn spooked investors on the trading floor,” it said.

Many investors remained conservative in market-investment, hence they expect that the inflation and exchange-rate volatility may get elevated in the coming quarters, due to global commodity price hikes and growing current account deficits, adding further grounds to the volatilities on equities in the capital market, according to the note.

All the sectors but textile closed in red, pushing the benchmark index toward south. Insurers, ceramics, cement, IT, pharmaceuticals, banks, telecommunications and mutual funds continued to face selling pressure.

Individually, the most points taken off the index were by Grameenphone, which stripped the key index of over 4 points followed by Beximco with 3.88 points, Walton Hi-Tech Industries with 3 points, Lafarge Holcim Bangladesh 1.85 points, BATBC with 1.72 points, Beacon Pharmaceuticals 1,68 per cent.

Out of the 386 issues traded, 84 advanced, 253 declined, and 49 remained unchanged.

The worst losers included Southeast Bank, Rupali Bank, Midas Finance, Shinepukur Ceramics, Sonali Life Insurance, Bangas and Sinobangla Industries.

Meghna Insurance rose 9.77 per cent, extending its gaining for the third consecutive session since its debut.

The most traded stocks included IPDC, Shinepukur Ceramics, ACI Formulations, Delta Life Insurance, JMI Hospital Requisite Manufacturing, Beximco and BDCOM Online.

The port city bourse, CSE, also, settled in red terrain. The selected indices (CSCX) and All Share Price Index (CASPI) have declined by 62.1 and 101.7 points respectively.