Stocks back with a bang on positive triggers

Dhaka stocks staged strong recovery from the overnight lows as investors were back in the market and covered positions at the lower levels triggered by the regulatory move to boost confidence.

The benchmark DSEX index rose sharply 155 points or 2.4 per cent to settle at 6,630, recovering from recent plunges. The index was its largest single-day rise in 14 months since January 3, 2021 when it gained 216 points.

Wednesday’s frenzy comes on the back of recent carnage, when the index sank more than 550 points in a new low in 11 months.

The index reversed the trend aided by active institutional and retail buying after the securities regulator BSEC instructed stock exchanges to calculate the lower limit circuit breaker at 2 per cent for all issues.

The index opened sharply higher in the morning as traders looked past Russia’s attack on Ukraine and rushed to buy stocks at lower prices, dealers say.

All sectors turned green led by IT, NBFI, and insurance which gained more than 5 per cent each. The heavyweight sectors—bank and telecommunications—surged more than 1 per cent each.

Two other junior indices—the Shariah-based DSES moved up 30 points or 2.17 per cent to 1,429. The blue-chip comprising DS30 index soared 41 points or 1.74 per cent to 2,415.

The recovery came largely on the back of temporary regulatory measures. “Strong volumes have also lifted sentiment, with investors clearly lured by relatively cheap valuations on offer,” said a broker.

“Equity indices of the capital bourse charged up by regulatory moves as investor are much relieved and decided to take fresh position on low priced issues which fuelled the core index to close substantially higher,” said the EBL Securities in a note.

Meanwhile, in order to restore market confidence, BSEC has implemented temporary circuit breaker regulations with a lower level of 2 per cent and directed ICB to assist the market from the stabilisation fund. “Investors regarded these changes favourably, and as a result, the market saw an upsurge due to buying spree,” said the EBL Securities.

The top gainers rising more than 9 per cent each were Nitol Insurance Co, Federal Insurance, BD Thai Food & Beverage, BDCOM Online, Dragon Sweater and Spinning, Bangladesh National Insurance Company, Eastland Insurance Company, United Insurance, Asia Insurance and Genex Infosys.

Walton Hi-Tech Industries contributed 25 points to the benchmark index, followed by Grameenphone (8.38), British American Tobacco Bangladesh Company (5.8), Berger Paint Bangladesh ( 5.58), Lafarge Holcim Bnagladesh ( 5.28) and Renata ( 4.64).

The port city bourse, CSE, also settled in green terrain. The selected indices (CSCX) and All Share Price Index (CASPI) have advanced by 226.8 points and 382.5 points respectively.