Gas price hike pushes stocks down
IT, life insurance, and pharmaceutical stocks contributed the most to the DSE turnover yesterday
Stocks faced a major pause in recovery amid sharpened selloff by profit bookers on Wednesday as soon as the news of gas price hike came.
The government on Wednesday announced up to 179% hikes in the prices of gas the national grid supplies to various users.
Household users are yet to pay more, while commercial users like hotels and restaurants would face the least price jump of 14%.
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On the other hand, power producers are set to pay 179% more for the gas they use, industries 150%-178% more, while the gas factories used in captive power generation would become 88% costlier from 1 February.
The sharp rise in the key industrial fuel's price would hurt manufacturers' profitability, feared analysts.
In continuation of the previous day's upward momentum, the market opened higher on Wednesday.
However, sellers realised some of their recent gains in most of the stocks and their dominance continued till the closing bell.
DSEX, the broad-based index of the Dhaka Stock Exchange (DSE), fell by 0.37% to 6,258 following its intraday peak of over 6,300.
"The equity indices of the Dhaka bourse failed to uphold the upward momentum from the previous session amid uncertainty regarding the market outlook owing to fears over the dismal performance forecasts of the listed companies," wrote EBL Securities in its daily market commentary.
The market remained flat in the first hour of the session, but subsequent choppy trading from cautious investors due to concerns over the major hike in fuel and energy prices for industrial and commercial sectors caused the core index to tumble, said EBL Securities analysts.
Moreover, investors were looking for rebalancing their portfolio to keep up with the trend of the current market momentum, which helped some stocks stay afloat, while most others declined.
Meanwhile, the Dhaka bourse observed a slight increase in participation while total turnover rose by 3.8% to Tk934 crore.
On the sectoral front, IT, life insurance and pharmaceutical stocks contributed the most to the DSE turnover, 17.1%, 13.4% and 12.8% respectively.
Most of the sectors displayed dismal returns, out of which travel and leisure, services, real estate and paper-printing sectors' market capitalisation eroded by more than 3% in a day, while the life insurance, ceramic and tannery sectors inched up.
Yesterday, 49 scrips advanced, and 138 declined in the DSE.
