Dhaka, Bangladesh (BBN)– Dhaka stocks fell for the second straight session on Monday amid volatility, as investors reacted negatively to the central bank’s policy interest rate hike effort fearing further liquidity pressures on the stock market.
The market was in down trend throughout the trading session amidst lack of buying pressure, as index ended firmly in negative territory. The index was resting marginally above 6,140 points having lost around 50 points at the end of trading on the day.
The benchmark General Index of the DSE plunged 51.28 points or 0.82 percent to close at 6,141.79 on Monday.
The broader All Shares Price Index (DSI) went down by 40.86 points or 0.78 percent to close at 5,144.23. The DSE-20 Index comprising blue-chip shares also lost 30.87 points or 0.73 percent to close at 4,154.18.
The central bank of Bangladesh hiked its policy interest rates by 50 basis points after more than two months to curb inflationary pressures on the economy which came into effect from Monday.
“Investors reacted negatively to the interest rate hike fearing further liquidity dearth in the stock market. Specially, increasing repo rate will make the short-term borrowing more expensive for the banks and financial institutions,” commented LankaBangla Securities in its daily market analysis.
Share prices of most of the issues traded on the day declined. Out of 255 issues traded, only 34 advanced and 207 declined while 14 remained unchanged.
However, turnover increased slightly and stood at BDT 3.72 billion in value terms, up by 21.92 percent, from BDT 3.05 billion in the previous session.
Total market capitalisation of the DSE, however, declined slightly to BDT 2,927.47 billion against BDT 2,949 billion of the previous level.
All sectors except fuel and power ended in red zone as selling pressure witnessed all across the board.
Banking sector, the market’s bellwether of the DSE, lost 1.10 percent, whereas insurance, NBFIs and textile sectors declined by 1.0 percent, 1.30 percent and 2.30 percent respectively.
Fuel and power sector was the only sector which ended in the green zone appreciating by 0.27 percent as state-owned companies—Titas Gas and Power Grid in particular, gained well.
BBN/SSR/AD-05Sept11-11:52 pm (BST)