DSEX tumbles 2.74% to a seven-month low

The stock market continued its free fall as investors' worries about the rising commodity prices are yet to ease.

Due to aggressive selling pressure, DSEX, the benchmark index of Dhaka Stock Exchange (DSE), slid 182 points or 2.74% to close at 6,457 on Monday.

Since the full-scale Russian invasion of Ukraine began on 24 February, DSEX has lost 492 points.

Professor Shibli Rubayat-Ul-Islam, chairman of the Bangladesh Securities and Exchange Commission (BSEC), at a programme on Sunday said there has been no straight fundamental reason behind the downtrend of the prime index.

It was instead a reflection of investors' fears.

Analysts said since the war, disrupting supply, is pushing the prices of crude oil, wheat and many other important commodities higher and higher, it already began to hurt consumers and also might bite on the overall corporate profitability.

Since no clear sign of the Ukraine war being a short-lived one, cautious investors are increasingly preferring to stay on cash than hold falling stocks and that is a reason why price fall was getting deeper.

Monday's fall was the sharpest since 4 April last year, according to DSE.

A large number of investors were engaged in selling shares from the beginning of Monday's trading session as they found the market only declining in the turbulent days.

Consequently, the DSEX index fell below the psychological threshold of 6,500 and that further intensified the selling pressure, said the stockbrokers. 

At the end of the session, only seven scrips advanced on the DSE, while 364 declined and eight remained unchanged.

"Investors' confidence is yet to recover, fearing further contraction in their equity, most of them favoured exit to safeguard their investments," EBL Securities wrote in its daily market commentary.

Since the beginning of the downfall in the last week of February, daily turnover on the market came down below the Tk1,000 crore level.

However, intense selling pressure on Monday increased the daily turnover on the DSE by 13.6% to Tk740 crore from Tk650 crore.

On the sectoral front, textile, pharmaceuticals, and miscellaneous contributed most to the daily turnover on the country's premier bourse.

All the sectors were in the bears' grip while cement, general insurance and ceramic sectors were the biggest sufferers as their respective market capitalisation squeezed by 6.1%, 4.6% and 4.4%, respectively.

The port city bourse, Chittagong Stock Exchange (CSE), also settled in red terrain having a similar magnitude of downfall.

Some institutional fund managers informed they are seriously shopping around for their favourite stocks as the price of those came down in recent weeks too.