Stocks spiral into red amid virus worry

Stocks saw another deep red day on Sunday amid worries over the resurgence of the novel coronavirus.

DSEX, the broad-based index at the Dhaka Stock Exchange (DSE), nosedived at the beginning of the day's trade and closed the day at 1.56% lower at 5,349 points.

Meanwhile, blue-chip index DS30 slid by 1.9%, indicating more sales pressure on selective stocks.

"Equity benchmarks of the country spiralled further into the red territory as the resurgence of Covid-19 cases in the country shattered the market amid fears of a second lockdown," said EBL Securities in its daily market recap on Sunday.

"Investors traded cautiously despite Bangladesh Securities and Exchange Commission (BSEC) assuring that there is no such possibility of keeping the stock market shut," it added.

But the regulator's efforts to tame the panic among investors was not that fruitful.

Dhaka and Chattogram stocks have been in a correction since late January. They began a fresh downturn at the end of last week following the health ministry's concerns about the rise in Covid-19 infections and deaths.

BSEC on Sunday afternoon held a meeting with brokerage and investment banking industry leaders as well as representatives of the top 10 brokerage firms to discuss the market situation.

Sources said the meeting headed by BSEC Commissioner Professor Shaikh Shamsuddin Ahmed emphasised institutional buy orders to offset the effects of panic selling mainly by retail investors.

The regulator also expressed its readiness to allow stockbrokers to put their own buy orders before that of their clients, which was prohibited in securities law.

As Sunday's fall in indices surpassed that on Thursday, investors' confidence remained shaky and their participation in trading further declined. Turnover at the DSE declined by 10% to Tk616 crore. 

No single sector was able to escape Sunday's contraction of market capitalisation.

Miscellaneous with 3.5% fall, engineering with 3.3% fall, and services with 3.2% fall observed the biggest declines over the session.

Out of the 348 issues traded, 31 advanced, 239 declined, and 78 remained unchanged.

Meanwhile, at the Chittagong Stock Exchange (CSE), indices fell by 1.5-1.7%, with a meagre 4% rise in turnover.