Home ›› 03 Dec 2021 ›› Stock
Dhaka stocks ended sharply higher on Thursday as good news and bad news fuelled high volatility during the intraday trading.
The benchmark DSEX index plunged almost 90 points at open taking a cue from the central bank’s clarification about the bank’s exposure to the stock market and recovered all the losses at close due to news about a meeting called by the finance ministry on capital market scheduled for next week.
At the end of the day, the index gained 89 points or 1.3 per cent to 6,936, hitting a low of 6,758 and a high of 6,947. The intraday volatility point was 180 points.
The market erased all the losses seen in the early trading due to the institutional buying, said a source in a merchant bank. Institutional investors pumped huge funds into the market under the influence of the government high-ups, he said.
“Dhaka stocks jumped through recovery attempts as investors rushed to buy scrips after media reported that Ministry of Finance has called a meeting with BB, BSEC and NBR chiefs over the capital market situation,” said EBL Securities in a note.
Stocks dropped at open as the contradictory statements from BB and BSEC had only worsened investors’ confidence on the bourse due to the ongoing policy tussle, it said.
However, the index reversed the early downward beat as buying spree from institutional investors pushed the market to settle in green trajectory, it added.
The market got a boost on Wednesday, triggered by the news about the central bank’s move to relax the rules on the bank’s exposure to the stock market.
The BB had agreed to relax the rules on banks’ investment in stocks to shore up the capital market and settle the differences between the central bank and securities regulators, said a BSEC official after the meeting with the BB on Tuesday.
On Wednesday, the BB came up with the clarification about the statement given by the BSEC and said the BSEC delegation raised the legal complexities about the bank and financial institution’s exposures to the stock market in the Banking Companies Act, 1991 and the Financial Institutions Act, 1993 at the meeting. “But no decision has been taken yet about the issues but some media outlets reported about the outcome of the meeting by quoting the BSEC delegation, which was not accurate,” said the BB.
The financial institution sector led the rally surging 4.8 per cent, followed by paper 4.6 per cent and energy 4.3 per cent while tannery, life insurance and IT faced the selloff.
The majority of the stocks closed in green territory. Out of the 374 issues traded, 208 advanced, 118 declined, and 48 remained unchanged.
The port city bourse, CSE, also settled in green terrain. The selected indices (CSCX) and All Share Price Index (CASPI) advanced by 156.7 points and 256.6 points respectively.
