Bourses in meltdown all over the globe
Stocks all around the world, including in Dhaka, went on a freefall again yesterday, a day after the coronavirus outbreak was declared a global pandemic by the World Health Organisation.
There are 118,000 cases, more than 4,000 deaths, the agency said, and the virus has found a foothold on every continent except for Antarctica.
DSEX, the benchmark index of the Dhaka Stock Exchange, dropped 101.52 points, or 2.39 per cent, to close the day at 4,129.96.
The fall means the recovery from Monday's 255 points plunge, the steepest fall since in 2013, was short-lived, as nervous investors went for sell-offs to escape further losses.
The coronavirus is affecting almost all the listed companies due to the shortage of raw materials that come from external sources, including China, and shrinking consumption in the affected countries.
So, it would impact the earnings of the companies, said a top official of an asset management company.
The virus has spread to more than 116 countries, including Bangladesh and the country's export destinations. China, the largest trading partner of Bangladesh, is the epicentre of the virus.
If the virus contagion continues, it would affect the economy and thus the listed companies, he added.
This has left the global economy reeling.
Yesterday, global stocks tumbled after the US suspended travel from Europe. Some weaker companies warned about their prospects for survival.
Trading in the US was halted after the S&P 500 fell 7 per cent. The index triggered a circuit breaker for the second time in a week. The halt, for 15 minutes, is intended to prevent markets from crashing.
The waves of selling this week have left the Dow Jones industrial average and several major global benchmarks in bear market territory -- a term that signifies stocks have fallen more than 20 per cent from their highs. Without a substantial recovery on Thursday, the S&P 500 will end there as well.
Europe also saw bearish day due to the fear of the world economy contraction riding on the epidemic coronavirus.
Eurozone's stock index Euro Stoxx 50 Pr fell 5.9 per cent, London's FTSE 100 Index 5.71 per cent, Germany's Dax Index 5.92 per cent and Spain's IBEX 35 6.15 per cent.
Asian stocks plunged too. Japan's Nikkei 225 fell 4.41 per cent, Hong Kong's Hang Sang Index 3.66 per cent and India's BSE Sensex 8.18 per cent.
Bangladesh's economy is not isolated from the world economy, so its impact was observed on the stock market, said a leading merchant banker.
"The panicked investors have lost confidence in the market," he said.
On Monday, the massive sell pressure came after the first cases of coronavirus were confirmed in Bangladesh amid deepening fears about the spread of the infection in the country which might affects the country's economy, said International Leasing Securities in its weekly market analysis.
Besides, the macroeconomic indicators, including the falling credit and deposit growth in the private sector and the declining export earnings, also led the shaky investors to liquidate their holdings, it added.