Stocks continue to bleed amid uncertain market outlook

Dhaka stocks extended losses for the fifth consecutive session on Sunday as, according to market insiders, investors remained hesitant to pour funds amid concerns over economic uncertainties arising from tensions in the Middle East.

The DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), also experienced a downturn, ending 32 points lower at 5,663, while the blue-chip index DS30 dropped 2 points to close at 1,982.

Only 75 stocks advanced, 285 declined, and 33 remained unchanged, while the DSE turnover fell by 8% to Tk478 crore compared to the previous session. Over the past five sessions, the DSEX has recorded a cumulative loss of 211 points.

The managing director of a brokerage firm told The Business Standard that bearish sentiment has arisen among investors.

"There are a few reasons behind the ongoing bearish sentiment. One is that the securities regulator may impose restrictions like a floor price to tame the downfall amid Middle-East escalation," he said.

He further stated that investors are concerned about the bank merger issues. Besides, corporate earnings may suffer amid interest rate hikes, which have also shaken investor confidence.

EBL Securities said in its daily market review, the bearish vibe on the country's capital bourse continues, with the majority of scrips extending their correction mode owing to the enduring pessimism pervading the trading floor amidst an uncertain market outlook.

The indices observed a seesaw pattern of trading until mid-session on Sunday, with investors active on both sides of the trading fence, however, bears subsequently regained their dominance and led the market to prolong its downtrend with no major catalyst for a strong turnaround, it added.

However, cautious investors are being observant ahead of the upcoming corporate earnings declarations and seeking quick gain opportunities, taking advantage of the prolonged corrections in the market, the review noted.

Despite the DSEX losing over 200 points in the last five days, the market capitalisation jumped by Tk19,975 crore to reach Tk7.04 lakh crore at the DSE.

A senior officer at the DSE said, all company shares are not listed in the DSEX, and the index changes with fluctuations in the share prices of those included. Share prices of companies outside the index have increased, leading to an increase in market capitalisation despite the index decreasing.

The index now counts 251 companies in total, the lowest number in five years. However, the number of companies and mutual funds listed on the Dhaka bourse is 391. As such, the transactions of 140 companies are not reflected in the DSEX index.

Meanwhile, the port city bourse, the Chittagong Stock Exchange (CSE), also settled on red terrain. The selected indices, CSCX and all-share price index CASPI, declined by 69.4 and 119.5 points, respectively.