Stocks plunge on Omicron scare

Major indices of the domestic stock market took a nosedive yesterday despite breaking a six-day losing streak just the day before due to intensifying fears surrounding a fresh breakout of Covid-19, according to experts.

However, underlying issues like the ongoing tussle between Bangladesh Bank and the Bangladesh Securities and Exchange Commission (BSEC) could also be behind the dip, they said.

The DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), shed 92 points, or 1.35 per cent, to hit 6,703 yesterday, its lowest position in the last three-and-a-half months.

The previous lowest came on August 12 this year, when the DSEX stood at 6,699 points, according to DSE data.

With the Omicron variant of Covid-19 spreading across Europe and South Africa, Bangladesh is also at risk of a fresh wave of infections.

As such, many countries have reintroduced travel restrictions and other measures that may impact the earnings of locally listed companies.

"So, the index fell as many investors are being cautious," a merchant banker said. At the DSE, 65 stocks advanced, 206 declined and 40 remained unchanged.

On the other hand, turnover of the Dhaka bourse rose to Tk 1,146 crore yesterday, up 61 per cent from the previous day's Tk 708 crore.

A stock broker, preferring anonymity, attributed the market's fall to a confidence crisis among investors due to unresolved issues between the central bank and BSEC.

A tussle between two of the country's main regulatory bodies in the financial sector is not a good sign for the market and so, it had a negative impact on investor confidence, he said.

"But no good indication came from them [investors] until the market was open," the stock broker added.

Orion Infusion topped the gainers list, rising 9.93 per cent, followed by Sena Kalyan Insurance, Acme Pesticides, National Life Insurance, and Renwick Jajneswar and Co.

The Dhaka bourse witnessed a massive crash in its prime index after a single-day break as pessimistic investors preferred to book quick profits in the session, International Leasing Securities said in its daily market review.

Rising tensions over the Omicron variant might have also led to panic among investors that it may have a negative impact on the country's economy, discouraging investors from making fresh bets in sector-specific shares.

The market started with an optimistic vibe but after the first hour of trade, heavy selling pressure gradually pulled down the benchmark index till the end, it added.

Stocks of One Bank traded the most, worth Tk 189 crore, followed by Beximco Ltd, Beximco Pharmaceuticals, IFIC Bank, and Paramount Textiles.

Desh Garments shed the most, losing 4.97 per cent, followed by Emerald Oil, Beach Hatchery, ShurWid Industries, and Aramit Cement.

The Chittagong Stock Exchange (CSE) also dropped yesterday. The CASPI, the bourse's main index, fell 270 points, or 1.35 per cent, to 19,607.

Among the 278 traded stocks, 62 rose, 192 fell and 24 remained the same.