As the value of the taka declines, stocks plummet.
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Stocks fell sharply on Wednesday, unable to hold onto recent gains.
On Wednesday, the DSEX, the broad-based index of the Dhaka Stock Exchange (DSE), was down 0.77% to 6,487 while the DS30, the blue-chip index, fell 0.86%.
In contrast to the 175 scripts that declined, just 72 scripts, largely small-cap ones, gained. 124 scripts stayed steady as a result of many of them being pushed below the price floor that the regulator instituted at the end of July.
After hitting a 14-month low of 5,963 in late July, DSEX increased to above 6,592 last week.
Analysts and stockbrokers claimed that as soon as the taka continued to decline against the US dollar, investors’ hopes for a gradual improvement in the macroeconomic situation—which is now represented through the exchange rate—seemed to have been dampened.
The interbank price of the US dollar officially jumped to Tk106.9 on Tuesday as soon as the Bangladesh Bank relaxed its control over exchange rates. This double-digit depreciation of the local currency overnight raised concerns about a worsening situation in the curb market.
Up until 12 o’clock in the afternoon, the market was making an effort to hold above the previous day’s closing price, but obstinate sellers kept driving it lower until the session’s end.
The DSE’s daily turnover fell to Tk1,307 crore from Tk1,480 crore on Wednesday due to buyers’ caution, which led to a decrease in trading activity.
