Stocks nosedive as virus infections reach record high

With the daily Covid-19 infection cases reaching new highs and some restrictive measures announced by the government, investors are shakier now.

Stocks at both the Dhaka and Chattogram bourses suffered an increased sell pressure and all the indices nosedived again on Wednesday.

DSEX, the broad-based index at the Dhaka Stock Exchange, fell by 95 points or 1.77% to close at 5,278 – a three-month low.

"Investors perceived fear due to the fast increase of Covid-19 infections, as they deemed an adverse impact on the economy and earnings of the listed companies," said EBL Securities in its daily market commentary.  

The panic resulted in only 11 gainers in the DSE on Wednesday, against 257 losers, while the price of 80 scrips remained unchanged mainly because they are stuck on the floor price the market regulator imposed a year ago.

Tushar, a retail investor at a Motijheel area brokerage house told The Business Standard that he was optimistic for a market reversal at this phase following the ongoing correction since the last week of January. But the Covid-19 situation along with the sell pressure made him conservative and he sold off one-third of his holdings.

Most of the investors remained on the side lines to observe the market movement. As a result, participation was dismal on the bourse, said EBL Securities research team.

Trading turnover at the DSE fell by 11.7% on Wednesday to register Tk560 crore in daily total.

The recent trend of intensified sell pressure in selective shares continued as the blue-chip index DS30 fell by more than 2%, while the Shariah index DSES fell by 1.38% only.

The secondary market debut of private sector non-life insurer - Desh General Insurance Company Ltd - has been the most discussed topic across the street as the price of the new scrip increased to the day's maximum allowable limit.

On Wednesday, no single sector was able to escape price correction while only tannery and travel-leisure sectors managed to arrest the decline of their respective market capitalisation within 1%.

Jute, miscellaneous and service-real estate suffered the biggest fall ranging from 3% to 4.6%.

Meanwhile, the Chittagong Stock Exchange lost 2.1% of its total market capitalisation, with 9% decline in trading turnover.