Stocks recover after sharp losses

Shares on the Dhaka Stock Exchange bounced back yesterday, recovering from a massive fall in the previous two sessions, supported by lower sales and higher trading of lucrative equities.

The DSEX, the benchmark index of the premier bourse of Bangladesh, closed up 120 points, or 1.74 per cent, to end the day at 7,005.

The advance came after the main index dropped to its lowest level since August 31 on Monday due to panic sales influenced by speculation and recent market trends. It had shed 120 points to 6,885 on the day, the highest single-day slump since April 11.

Most shares have dropped 4 to 5 per cent in the last few days, becoming attractive, so some investors took the opportunity to buy securities, said a merchant banker.

People also didn't want to sell shares after they had dropped in the last few days, sending the key index above the 7,000-point mark despite lower turnover.

Turnover, another important indicator of the market, fell to Tk 1,386 crore from Tk 1,470 crore a session earlier.

On the DSE, gainers outnumbered losers as 340 stocks advanced, 22 declined, and 14 remained unchanged.

The stocks returned to the positive territory after two consecutive sessions as investors showed the appetite for sector-specific stocks, said brokerage house International Leasing in its daily market review.

Yesterday, the DSEX was in the red territory in the first two trading hours before reversing the trend. The gains continued until the end of the day owing to the active presence of the bargain-hunters.

The turnover had remained below Tk 1,500 crore as some investors became cautious and were observing the market movement amid the ongoing volatility of the index, the brokerage house said.

Among major sectors, services and real estate, travel and leisure, and textile sectors experienced price appreciation while the telecom sector faced correction, according to UCB Stock Brokerage.

Some investors thought that the market had already had enough correction in the last two weeks, so they bought shares, said a stockbroker.

The market regulator also persuaded institutional investors not to sell shares, arguing the market is safe to invest. This helped the key index stage a comeback, he said.

"I think the market is not risky yet. Moreover, many stocks are lucrative. So, we told investors not to sell shares. But, they have to hold the shares of the good companies."

KDS Accessories topped the list of the gainers, rising 10 per cent, followed by Active Fine Chemicals, Bangladesh Monospool Paper, Nurani Dyeing, and Eastern Housing.

Beximco Ltd was the most traded stock, with its securities worth Tk 86 crore changing hands. Delta Life Insurance, NRB Commercial Bank, Orion Pharmaceuticals, and Fortune Shoes also saw heavy trading.

Olympic Accessories gave up the most, shedding 9.90 per cent, followed by Summit Power, Dragon Sweater, Islamic Finance, and Tung Hai Knitting.

Due to the increase of BATBC, Robi Axiata, ICB, Beximco Ltd and Titas Gas, the benchmark index of the DSE rose 28 points, according to amarstock.com, a stock market data provider.

The Chattogram bourse also rose. The CASPI, the main index of the Chittagong Stock Exchange, was up 274 points, or 1.36 per cent, to end the day at 20,444.

Among the 300 stocks traded, 245 rose, 33 fell, and 22 were unchanged.