Market falls again over virus outbreak

After posting gains in two previous sessions, stocks fell again on Thursday as panicked investors adopted a defensive approach anticipating further plunge due to the coronavirus outbreak. 

The DSEX, the prime index of the Dhaka Stock Exchange (DSE), plunged 102 points, or 2.4 percent, to close the day at 4,130. 

The Shariah-based DSES index also dropped 22 points, or 2.2 percent, to settle at 958, while the blue-chip index DS30 lost 32 points, or 2.3 percent, to stand at 1,382. 

At the Chittagong Stock Exchange (CSE), the benchmark index Caspi lost 235 points, or 1.8 percent, to close at 12,643.

The key index of the DSE started to decline from the beginning of the session and it came down to 4,105 at around 1pm. However, it exhibited moderate growth during the last hour of trade but failed to hold the upward movement till the end of the session. Finally, the indices showed an overall downward trend in their intraday performance graphs on Thursday. 

According to the Daily Market Review of EBL Securities Ltd, the market fell on Thursday because most of the investors were active on the selling fence and hence liquidated their holdings on the current market movement. 

The panic-driven investors have lost confidence on the capital market because of the threats of coronavirus outbreak, since the global stock markets are already affected, added the review. 

Moreover, the macroeconomic factors such as lowering credit and deposit growth in the private sector, expecting inflation, and rising public debt from the banking sector have also led the market to the downward turn, the review further added. 

According to the Daily Market Review of UCB Capital Management Ltd, a section of foreign buyers has informed the Bangladeshi apparel exporters that they would cut down their existing orders by 15 to 30 percent due to the virus outbreak. 

As a result, it has led to the market fall on Thursday since the virus stood as a major risk for the capital market and the economy. 

All the sectors posted losses on Thursday with the financial institutions facing the highest price correction of 4.5 percent, and food sector registering the least correction of 0.3 percent in the sector return board. 

Among the other large-cap sectors, telecom shed 3 percent price, banks lost 2.6 percent, and pharmaceuticals sector inched down 0.8 percent. 

Investors' participation remained sluggish on the trading floor which resulted in decreased turnover in both bourses on Thursday.

Turnover at the DSE decreased 3.1 percent to Tk409.4 crore on Thursday, from Tk422.5 crore in the previous session. 

Turnover at the port city bourse also went down 34 percent from Tk17.5 crore to Tk11.6 crore.

The pharmaceuticals sector contributed the most, 31.3 percent, to the total turnover value, followed by engineering stocks adding 13.2 percent and the textile sector adding 9.7 percent in the sector-wise turnover distribution board. 

Orion Pharma Ltd topped the turnover chart with a turnover value of Tk18.5 crore, closing the day at Tk44.9 per share. The stock was followed by Beacon Pharmaceuticals Ltd with a turnover value of Tk11.5 crore, closing at Tk65.1 per share. 

Orion Pharma Ltd was also the best performer in the gainers' table, gaining 8.98 percent while Delta Brac Housing Finance Corporation Ltd was the worst loser shedding 17 percent and closing at Tk96 per share, said the DSE website. 

Losers sharply outnumbered the gainers as out of the 351 issues traded on Thursday, 36 advanced, 293 declined, and 22 remained unchanged on the DSE trading floor.