Stocks fall for third day as profit booking continues
The domestic stock market dropped for a third consecutive day as shaky investors continued to book profits following a recent upsurge in share values, according to market analysts.
After facing corrections in the two preceding trading sessions, the market started slow yesterday with investors selling off their stakes in major sectors, International Leasing Securities said in its daily review.
The investors were in a selling mood as the International Monetary Fund (IMF) recently cut its economic growth forecast for Bangladesh to 6.5 per cent for the current fiscal year.
The IMF revised its projection from the 7.5 per cent set in April as the skyrocketing prices of raw materials in international markets will severely strain the country's industries, it added.
"But while investors were busy taking their profits, the insurance sector returned to the scene as their prevalence in the gainers list was higher," a stock broker said.
The DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), fell by 65 points, or 0.89 per cent, to 7,248 yesterday.
Similarly, the blue-chip index, DS-30, fell 32 points, or 1.17 per cent, to 2,717.
According to analysts, the insurance sector is overvalued and so, investors should avoid it.
"But manipulators are spreading many rumours to attract general investors to the sector so that the rogue players can exit with profits," he added.
Eastern Insurance topped the gainers list, rising 9.98 per cent, followed by NRB Commercial Bank, Janata Insurance, Reliance Insurance, and Global Insurance.
The stock market regulator does not normally focus on manipulation when the market falls, a merchant banker said.
Besides, it still encourages people to buy stocks so manipulators take the chance.
"Whenever the market is falling, manipulators choose the stocks," he said, adding that the market regulator should remain vigilant at all times so that people cannot take advantage of the system.
Among major sectors, general insurance, life insurance, and the food and allied products sectors experienced price appreciation while the cement and non-bank financial institution sectors faced correction, according to UCB Stock Brokerage.
The general insurance sector soared at an average of 3.42 per cent while life insurance increased 1.60 per cent, the brokerage firm added.
At the DSE, 106 stocks rose, 241 declined and 29 remained unchanged.
Turnover of the Dhaka bourse advanced 4 per cent to Tk 1,952 crore, up from Tk 1,863 crore a day earlier.
Stocks of Fortune Shoes traded the most, worth Tk 182 crore, followed by LafargeHolcim Bangladesh, IFIC Bank, Orion Pharmaceuticals, and Beximco Limited.
Far East Knitting shed the most, falling 7.39 per cent, followed by Tung Hai Knitting, Indo-Bangla Pharmaceuticals, LafargeHolcim Bangladesh, and Desh Garments.
The Chattogram Stock Exchange also fell yesterday as the CASPI, the general index of the port city bourse, dropped 176 points, or 0.82 per cent, to 21,183.
Among 315 traded stocks, 89 advanced, 203 fell and 23 remained unchanged.