Stock market came under a tight bear hug yesterday, as panic gripped investors following the news of arrest warrant against BNP Chairperson Khaleda Zia.
The market was in the positive territory in the morning but when the news broke, the investors began reacting negatively dumping their holdings to save their investments, according to dealers.
The intra-day volatility was more than 70 points—the highest in recent years. At the end of the day, the benchmark index DSEX plunged around 60 points or 1.3% to settle at 4,742, its lowest since February 9 last.
The Shariah Index DSES shed 13 points or 1.2% to 1,126. The comprising blue chips DS30 was down 23 points or 1.3% to 1,770.
Chittagong Stock Exchange Selective Categories Index, CSCX, lost 90 points to 8,818.
Though volume of trade increased due to selling spree, it still remained within the poor boundary, as turnover at the Dhaka Stock Exchange stood at over Tk342 crore, an increase of more than 10% over the previous session.
“The negative sentiments in the market were exacerbated by the developments on the political front as fears of heightening confrontation between the government and BNP ignited,” said a leading analyst.
He said panic selling gripped the market amid concerns for rising more violence across the country, which stemmed from arrest warrant of Begum Zia.
“Political uncertainty and anticipation of dismal data on macro economy played a catalyst role in bearish activity at the stock market,” he said.
Before mid-day yesterday, a Dhaka court issued arrest warrant against Khaleda Zia.
LankaBangla Securities said bearish sentiment of previous trading session extended as soon as arrest warrant was out for chairperson of opposition party.
“Market became depressed on renewal of political confrontation. Panicked investors held back investment and continued sell-off.” IDLC Investments said as the news came, panic-driven selling pressure turned down the market as investors tried to minimise losses.
All the sectors closed negative. Only Food & Allied sector was the only lucky sector that survived from investors selling wrath, posting a marginal rise.
Cement sector faced the intense selling spree with highest loss of 2.8%. Financial sectors saw heavy correction with banks and non-banking financial institutions that declined more than 1% and 2% respectively.
Power, telecommunication, engineering and pharmaceuticals were among others taking a heat of panic-driven sale.