Stocks rebound on BSEC move

Snapping its four-session losing streak, the benchmark DSEX index finally managed to gain some lost ground on Tuesday spurred by the securities regulator BSEC move on revising lower limit circuit system.

The index opened with deep cuts but eventually staged a strong recovery lifted by the regulatory move as traders looked past Russia’s attack on Ukraine and rushed to buy stocks at lower prices, dealers say.

The entire session was choppy as global sentiments favoured bears in the early trade and the market was rebounded mainly lifted by textile, IT, cement and fuel & power stocks.

At close, the DSEX gained 17 points or 0.27 per cent to settle at 6,474, hitting as low as 6,318 and as high as 6,497. In the previous four sessions, it shed about 300 points. Since the Russia-Ukraine conflict, the index lost 550 points.

The securities regulator BSEC instructed stock exchanges to calculate the lower limit circuit breaker at 2 per cent for all issues but the upper limit circuit will remain the same at 10 per cent.

“The move was taken to prevent the market crash,” said an analyst.

“The Bangladesh Securities and Exchange Commission directs temporarily the Dhaka Stock Exchange and the Chittagong Stock Exchange to impose standard price change limit of 2 per cent based on the previous trading day’s price,” said the regulator in an order in the day.

However, the upper limit of the circuit breaker and other conditions will remain unchanged, it said. The order will have immediate effect and remain in force until further order, according to the BSEC.

Two other junior indices—the Shariah-based DSES rose 17 points or 0.27 per cent to 1,399. The blue-chip comprising DS30 index saw a fractional rise of 0.31 points to 2,374.

“Dhaka stocks returned to the green territory, after losing 297.27 points in the last four consecutive sessions, as investors’ favoured to take a position in low-priced selective issues which helped the equity indices to close higher,” said the EBL Securities in a note.

Meanwhile, BSEC with a view to restoring market confidence has introduced interim rules of the circuit breaker with a lower limit of 2 per cent and instructed ICB to support the market from the stabilization fund, it said.

Investors viewed these moves positively hence, late hour session has observed upward momentum due to buying binge, it added.

Out of the 384 issues traded, 217 advanced, 116 declined, and 51 remained unchanged.

The port city bourse, CSE, also settled in green terrain. The selected indices (CSCX) and All Share Price Index (CASPI) have advanced by 18.2 points and 28.9 points respectively.