The general index of Dhaka Stock Exchange (DSE) yesterday plummeted by 92 points or 3 percent, the largest single day drop since 2001.
Starting the trading hours with 2971.11 points, the DSE General Index, also the benchmark index of the premier bourse, went down to 2849.92 points with a 121.19-point drop at one stage before closing the day at 2878.74 points.
Market insiders said selling pressure from the institutional investors especially the brokerage houses forced the market to start the morning trade with a steep fall.
They said the brokerage houses are unhappy with the Securities and Exchange Commission's (SEC) move on continuing ban on lending by the brokerage hosues to the investors for purchasing shares, while the SEC lifted the ban last week on merchant banks lending.
They said the general investors, especially who entered the market during a whooping rise of the scrips, have also become frustrated due to the intervention by the SEC to cool the market as many analysts were warning that the market is overheated.
The investors also got afraid with the SEC's warning that it would take hard measures if the indices continue to rise that could lead the market towards a possible collapse, the market people said.
However, earlier in last week the DSE general index jumped by 127 points or 4.31 percent, the largest single day rise since the introduction of the general index. The DSE introduced the general index on November 27, 2001 with a base of 817.62 points. The index, which excludes companies of 'Z' category, is calculated on the basis of price movement of individual stocks under 'A', 'B', 'G' and 'N' categories.
Along with the general index, the DSE All Share Price Index also dropped by 77.4 points, or 3 percent, to close at 2433.92 points.
Of the issues traded on the bourse, only 16 advanced, while 181 declined and 11 remained unchanged. A total of 8,429,980 shares and bonds worth Tk 135.19 crore changed hands.
On the Chittagong Stock Exchange (CSE), all the indices went down yesterday with the losers outnumbering the gainers.
The CSE Selective Categories Index fell by 133.34 points, or 2.75 percent, finishing the day at 4715.6 points, while the CSE All Share Price Index dropped by 218.82 points or, 2.87 percent, ending the day at 7390.41 points.
Of the issues traded, only five advanced with 90 declined and six unchanged. A total of 2,000,757 shares and bonds worth Tk 22.30 crore changed hands on the port city bourse.