Stocks suffered a major setback this week, with the benchmark index of the Dhaka Stock Exchange (DSE) falling below the 5,600-point threshold amid growing concerns over the country's prolonged energy crisis.
Market operators said persistent shortages of gas and electricity continued to weigh on investor sentiment as factory shutdowns, production disruptions and growing dependence on costly alternative energy sources raised concerns over industrial output and corporate profitability.
The worsening energy situation has already disrupted operations at a number of industrial units, while some factories have been forced to scale back production or rely more heavily on expensive alternative sources of energy to keep operations running.
"The persistent shortages are forcing factories to curtail production, suspend operations at times and rely on more expensive alternative sources of power," said a leading broker.
Such disruptions could translate into higher production costs, lower capacity utilisation and weaker revenues, raising fresh concerns about the earnings outlook of listed companies, he added.
Against this backdrop, investors reduced their exposure to equities, fearing prolonged production disruptions, higher operating costs and weaker corporate earnings.
Heightened investor anxiety, weak buying interest and short-term portfolio adjustments further intensified the selling pressure.
The week began with heavy selling pressure, as the DSEX plunged more than 100 points on Sunday. Stockbrokers attributed the sharp fall to panic selling, growing concerns over market interventions and broader economic uncertainty.
Following the sharp market plunge, the DSE and the DSE Brokers Association (DBA) held an emergency meeting on Tuesday to discuss the market downturn and possible measures to address the situation.
Stockbrokers said what they described as unnecessary interventions in brokerage firms were creating fear among market participants and contributing to the selling pressure, alongside the persistent energy crisis.
"Most brokers and market-related institutions are currently facing challenges. Therefore, the DSE, regulatory authorities and all stakeholders must work in coordination to restore confidence and normal market activities," said DBA President Saiful Islam.
Of the five trading sessions, four closed lower while only one managed to finish positive.
The DSEX, the benchmark index of the DSE, tumbled 147 points, or 2.59 per cent, over the week to close at 5,515, its lowest level in three months since June 8.
In its weekly market analysis, EBL Securities said persistent concerns over the ongoing energy crisis, a weakening corporate earnings outlook and cautious investor sentiment continued to weigh on market performance.
Although bargain hunters attempted to stage a reversal as declining prices offered increasingly attractive entry points, broader concerns over market uncertainty outweighed buying interest and sustained the negative momentum through the subsequent sessions.
The mutual fund sector, however, emerged as a notable exception, attracting persistent buying interest as short-term investors sought to capitalise on quick-gain opportunities amid faltering market momentum, said the stockbroker.
The DS30 index, which tracks blue-chip shares, also fell 45 points to 2,095, while the Shariah-based DSES index dropped 33 points to 1,105.
Price declines in several large-cap stocks, including Square Pharmaceuticals, Al-Arafah Islami Bank, BAT Bangladesh, LafargeHolcim Bangladesh and Eastern Bank, contributed more than 25 points to the weekly fall in the benchmark index.
Trading activity also weakened, with total turnover falling to Tk 27.71 billion from Tk 30.44 billion in the previous week.
As a result, average daily turnover dropped nearly 9 per cent to Tk 5.54 billion from Tk 6.09 billion in the preceding week.
The textile sector accounted for the largest share of the week's total turnover at 29.5 per cent, followed by general insurance at 14.2 percent and pharmaceuticals at 10.4 per cent.
Market breadth remained sharply negative, with 310 issues declining against only 60 advancing, while 16 remained unchanged on the prime bourse.
All sectors closed lower except mutual funds, which gained 3.7 per cent. Among the major sectors, non-bank financial institutions were the biggest loser, shedding 4 per cent, followed by engineering, power, pharma, telecom and banking.
Sharp Industries emerged as the most-traded stock of the week, with shares worth Tk 1.17 billion changing hands. Envoy Textiles, Malek Spinning Mills, Saiham Cotton Mills and Saiham Textile followed in terms of turnover.
The Chittagong Stock Exchange (CSE) also ended the week sharply lower. Its All Share Price Index (CASPI) plunged 306 points to close at 14,866, while the Selective Categories Index (CSCX) lost 191 points to 9,073.
