Stocks see steep fall amid profit booking

Dhaka stocks on Monday witnessed a precipitous fall, the second consecutive day, as investors opted to liquidate their holdings in order to harness short-term gains.

The DSEX, the key index of the Dhaka Stock Exchange (DSE), declined 31.0 points or 0.48 per cent to settle at a nearly 3-week low of 6,311 against 6,342 in the previous trading session.

Among other indices, the DS30, the blue-chip index, fell 5.6 points or 0.26 per cent to 2,185, and the DSES, the Shariah-based index dropped 5.6 points or 0.41 per cent to close at 1,372.

Turnover, another crucial market indicator, fell by 4.77 per cent to Tk 981 crore against the tally of Tk 1,031 crore in the previous trading session.

Block trades contributed 6.7 per cent of the overall market turnover.

The life insurance sector reined in the turnover chart with a contribution of 24.01 per cent of the total turnover of the DSE.

Earlier, on Tuesday last, the DSE had faced its sharpest selloff this year. The DSEX, that day, plunged by 40 points, or 0.63 per cent to 6,316 points. This decline was the largest drop for the major equity benchmark since November 20 of the previous year, when it fell by 0.81 per cent.

The premier bourse, according to market insiders, witnessed an intense selling pressure yesterday as cautious investors opted to liquidate their holdings in order to realise short-term gains, and safeguard their funds from the declining market.

All the large-cap sectors displayed negative performance on the day.

Despite the market being afloat until mid-session, the subsequent dominant sale pressure from cautious investors led the market to dip into negative territory again, said EBL Securities, a stockbroker, in its daily market review.

Investors remained watchful and preferred to monitor the market momentum before taking positions in equities, as the recent upward rallies in the market prompted them to expect a probable shift in the market momentum, it added.

Almost all the sectors displayed dismal returns, with the life insurance facing the highest correction of 3.9 per cent, followed by IT (2.7 per cent), and travel (2.7 per cent), according to EBL Securities.

On the other hand, only the mutual fund reported a slim return of 0.2 per cent.

Paper Processing & Packaging Limited topped the gainers’ chart of the DSE with a return of 8.2 per cent, while Meghna Life Insurance was the day’s worst sufferer with a loss of 9.5 per cent.

Out of the issues traded, 32 advanced, 140 declined and 220 remained unchanged at the Dhaka bourse.

Meanwhile, Finance Minister AHM Mustafa Kamal on June 1 had placed a Tk 7.6 trillion national budget for the fiscal year 2023–24 before the Parliament with a focus on tackling skyrocketing inflation, employment generation, the fourth industrial revolution, and ultimately building a smart Bangladesh.

Market insiders said the proposed budget has given neither good nor bad news to capital market investors.

Although stakeholders demanded some provisions in the new budget to woo investors as well as bring good firms to the market, most of their urges remained elusive in the proposed budget.