Stocks sink as selloff mounts amid economic, political tensions

Dhaka stocks tumbled on Sunday as investors went for heavy selloffs owing to an unclear market momentum amid the macroeconomic and political uncertainties.

The DSEX, the prime index of the Dhaka Stock Exchange (DSE), went down by 28.8 points to close 6,280 against 6,309 in the previous trading session.

The DS30 Index, which consists of blue-chips, fell 9.2 points to 2,136 and the DSES index, which represents Shariah-based companies, dropped 5.9 points to finish at 1,358.

Turnover, another crucial market indicator, plunged by 32 per cent to Tk 501 crore against the tally of Tk 735 crore in the previous trading session.

The general insurance sector topped the turnover chart with a contribution of 33.5 per cent of the total turnover of the Dhaka bourse, followed by food and allied (10.8 per cent) and IT (8.6 per cent).

Fu Wang Food Ltd was the most traded stock with Tk 22 crore worth of its shares changing hands, followed by Eastern Housing Limited, and Union Insurance Company Limited.

The market remained volatile throughout the session as opportunistic investors continued their profit booking, leading the key index to fell below the 6,300-mark again, stockbrokers said.

Stocks tumbled as investors went for heavy selloffs right from the start of the trading session owing to the uncertain market momentum amid the prevailing macroeconomic concerns and rising political tensions that induced shaky confidence among investors, said EBL Securities, a stockbroker, in its daily market review.

Sellers dominated the market as cautious investors engaged in profit booking in the hyped-up insurance stocks, along with the other sector-specific issues, as they anticipated a probable shift in market momentum, it added.

The market has been bearish since the floor price was imposed more than a year ago, with some periodic upward movements that failed to sustain amid investors’ confidence crisis.

The prevailing floor price has been discouraging investors, including the institutional ones, to put funds in stocks, while an uncertain economic outlook might be another reason as to why fresh investments were not coming in, analysts said.

As a result, investors were now focusing on short-term bets, with their confidence in the market almost exhausted, they added.

Most sectors displayed dismal returns, with the travel facing the highest loss of 3.2 per cent, followed by general insurance (2.5 per cent) and paper (2.4 per cent), according to EBL Securities.

As per the daily market review of Brac-epl Stock Brokerage, all the large-cap sectors posted negative performance, with the food and allied experiencing the highest loss of 0.48 per cent, followed by bank (0.15 per cent), pharmaceutical (0.14 per cent), engineering (0.11 per cent), fuel and power (0.08 per cent), NBFI (0.01 per cent), and telecommunication (0.00 per cent).

Investors preferred to realise their gains on sector specific stocks from the recent rallies as they anticipated a probable shift in market momentum owing to shaky confidence regarding the strength of the market trend, said a stockbroker.

Union Insurance Company Limited rose 9.9 per cent to become the day’s top gainer, while Agrani Insurance Co Ltd fell 11.8 per cent becoming the top loser.

Of the issues traded, 148 declined, 12 advanced, and 150 did not see any movement on the DSE trading floor.

The Chittagong Stock Exchange (CSE) also closed lower with its two major indices – the selected indices (CSCX), and the all-share price index (CASPI) – falling by 41.5 points and 68.7 points respectively.