Stocks closed marginally lower yesterday, despite a rate cut by the central bank to spur demand.
The market started the day on positive note but beginning of profit booking from mid-session has sent the market to the negative territory.
The benchmark index DSEX was down 20 points or 0.5% to 4,674, breaking its three-day rally.
The Shariah index DSES witnessed a fractional loss of 0.7 points to 1,118. The blue chip comprising index DS30 shed only 7 points to settle at 1,753.
The Chittagong Stock Exchange Selective Category Index CSCX shed 49 points to 8,688.
On Thursday, Bangladesh Bank slashed its key interest rate by 50 basis points to 6.75% and repo rate by 50 basis points to 5.25% after three years.
Generally, a rate cut makes it cheaper for banks to borrow from the central bank and in turn makes it easier for businesses and private people to borrow money from those banks.
IDLC Investments said profit booking pressure intensified, dragging down the indices, while a few selected scrips made steep gains.
The correction occurred despite the central bank’s declaration of Monetary Policy Statement (MPS) for the next six months of the current fiscal year with an expansionary tone.
Lower credit growth target set in MPS, which is still considerably higher than the actual figure, accompanied with rate cut is supposed to aid economy through financial sector.
Trading activities continued to subdue as the DSE turnover stood at Tk512 crore, sharply down 26% over the previous session. Investors’ attention was largely focused on engineering sector, contributing over 20% of the total turnover, followed by textile 14% and power 11%.
A new stock —Vanguard AML BD Finance Mutual Fund One — in its debut trading day, gained 30% over its face of Tk10 per share.
Profit booking took place on food and allied, non-banking financial institutions, bank, power and engineering. Telecommunication, pharmaceuticals and cement declined marginally.
Emerald Oil Industries topped in the turnover list with shares trading worth around Tk37 crore, followed by United Power Generation and Distribution Company Limited and BD Thai Aluminum.