Stocks rebounded on Wednesday ending a three-day setback, on expectation that the banks would reduce their lending rates. Investors, however, remained cautious during the day’s trading.
The benchmark DSEX index gained 26 points or 0.7% to 3,954, recovering from its previous session’s more than one and a half month low. The blue chip index DS30 was up 6 points or 0.5% to close at 1,441.
The Chittagong Stock Exchange Selective Category Index rose 44 points to 7,715.
“The market was back to the positive territory after the news on the central bank’s expectation on further fall in banks’ lending rate,” said a leading broker. Moreover, relatively calm in the political field, against the apprehension over unrest due to the death sentence to Salauddin Quader Chowdhury, has contributed to the rally, he said.
Trading activities, however, remained still sluggish at the DSE as the total turnover was Tk2.9bn, which was 19.2% higher over the previous session.
Buoyed by the increased level of trading volume in insurance, mutual fund and cement sectors, market reversed positively after falling 210 points in last 10 trading sessions, said Lanka Bangla Securities in its daily market analysis.
News on Bangladesh Bank’s expectation on further slump in bank lending rate to stimulate investment activities gave an impetus on the market, it said.
It said some fundamentally strong scrips might have greeted investors to take position at a very low price. However, market traded cautiously till the end as turnover amounted to only Tk2.9bn.
“Market came back into positivity with investors’ hub in lucrative scrips. Last few sessions’ continuous wane created some stimulus of undervaluation, which lured some of the witty participants to take position and create a natural re-bounce,” said IDLC Investment.
Besides, investors seemed to be more cautious in their trading activities ahead of Eid-Ul-Azha, it said.
Zenith Investments Ltd said although, the market was thronged with buyers, little enthusiasm from sellers kept the supply of shares down which stopped total turnover from surging.
Among the major sectors, financial institutions gained most 1.12%, followed by pharmaceuticals 0.73%, power 0.01%.
The other two heavyweight sectors banks and telecommunications ended in red losing 0.28% and 0.02% respectively.
Envoy Textiles was the most traded stock of the session with a turnover worth Tk124.5m. Three more issues from the textile sector featured in the top ten turnover’s chart while the entire sector contributed 21.1% of the total market turnover.
Other turnover leaders were Bangladesh Submarine Cable Company Ltd, Argon Denim, United Airways, Square Pharmaceuticals, CMC Kamal, JMI Syringe and Bangladesh Shipping Corporation.
