Dhaka stocks plunge amid political uncertainty, DSEX sheds 123 points
Market has been in downward trend for several weeks
Ongoing political turmoil in the country has taken a heavy toll on the stock market, prompting panic selling and forced disposals among investors.
On Thursday, DSEX, the benchmark Dhaka Stock Exchange fell sharply, shedding 123 points to close at 4,703, reflecting a deepening market downturn.
The blue-chip DS30 index lost 47 points to end at 1,851, while the Shariah index dropped 29 points to settle at 977.
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Despite the decline, market turnover fell by 32% to Tk383 crore, compared with Tk290 crore in the previous session. Of the 384 issues traded, 352 declined, 15 advanced, and 17 remained unchanged.
Investors have adopted a cautious approach, selling off shares and remaining on the sidelines amid a gloomy economic outlook, market insiders said.
However, some market participants took selective positions in undervalued and fundamentally strong stocks during the volatility.
Insiders said the market has been in a persistent downward trend for several weeks, with investors continuously incurring losses as the value of their holdings erodes.
The negative momentum intensified ahead of the enforcement of new margin loan regulations, which have forced many investors to sell shares under pressure. On Thursday alone, share prices of 31 companies hit their lower circuit limits.
The upcoming national election and ongoing political uncertainty, alongside broader economic concerns, have further deepened bearish sentiment.
Political uncertainty has emerged as the primary driver of the market's sluggish performance, affecting multiple sectors. New investments have nearly stalled, while imports of capital machinery, essential for industrial expansion, have dropped sharply.
Private sector credit growth has also weakened, indicating declining business confidence, insiders said.
At the same time, several fundamentally strong companies are reporting lower earnings, further undermining investor sentiment.
Historically, the market tends to remain subdued during such periods of economic and political uncertainty, intensifying concerns among retail and institutional investors.
An analyst, requesting anonymity, said political instability has become the foremost concern for investors, as no stock market can operate normally amid uncertainty.
He added that rising interest rates on treasury bonds and bills, combined with lower dividends declared by several listed companies, have further discouraged retail participation.
Despite the challenges, the analyst expressed cautious optimism, noting that investor activity could rebound once political stability returns.
Market observers also said any positive political development or improvement in sentiment could trigger a short-term recovery and reverse the current downtrend.
Market trend on Thursday
On Thursday, all large-cap sectors closed in the red. The Non-Bank Financial Institutions (NBFI) sector suffered the steepest fall, declining 3.42%.
Engineering dropped 2.40%, Food & Allied 2.14%, Pharmaceuticals 2.08%, Banking 2.05%, Fuel & Power 1.95%, and Telecommunications 1.58%.
Block trades accounted for 5.1% of total market turnover, with Summit Alliance Port Limited emerging as the day's most traded stock, losing 3.9% on a turnover of Tk18.6 crore.
The Chittagong Stock Exchange (CSE) mirrored the negative trend. The Selective Categories Index (CSCX) fell 128 points to 8,319, while the All Share Price Index (CASPI) dropped 217 points to 13,401.
