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Profit taking breaks four-day rally

  • Published at 03:35 am May 16th, 2013
Profit taking breaks four-day rally

Stocks fell in a volatile trade yesterday, ending a four-day rally as investors hastened to book profit due to poor earnings reports for first quarter and latest political development.

The benchmark DSE General Index, DGEN, was down 55.82 points or 1.41% to close at 3901, cutting from 158 points gained in the previous four sessions.

The new benchmark, DSEX, dropped 55 points or 1.47% to 3715. The DSE30 ended 18.13 points or 1.31% higher to 1361.

The Chittagong Stock Exchange Selective Category Index, CSCX, ended 109.96 points to 7323.

Turnover dropped to Tk4.09bn, down 3.5% over the previous session. Majority of issue prices closed in the negative territory as out of 270 total issues traded, 74 gained, 188 declined and eight remained unchanged.

Investors took profits most on engineering and pharma issues that shed more than 2% each, and non-banking financial institutions, telecommunications, pharmaceuticals and banks losing more than 1% each.

“The four-session long streak broke as sentiment went shaky over poor declarations and political vibes. In addition, a significant portion of investors went for profit booking, creating some selling pressure,” said IDLC Investment in its daily market analysis.

In addition, poor Q1 declarations, especially in heavyweight banking sector sparked worries among investors, and thus accelerated the downfall, it said.

Apparently, market seemed to stay concerned over recent developments, and Wednesday’s session could best be termed as a precautionary movement by investors, said a dealer.

First quarterly earnings results of different financial institutions and manufacturing companies continued to pour in the market.

“Most of the banking companies showed severe decline in the earnings, as they were compelled to keep provision against different loans and bills. Banking sector continued to saw decline in capitalisation with declining volume of 14%, according to Lanka Bangla Securities.

The impressive dividend declaration has made Orion Pharmaceuticals top turnover leader with shares Tk330m changing hands. The company recommended 20% stock and 20% cash dividends for the year 2012.

Other turnover leaders included United Airways, Summit Purbanchol Power Company Ltd, Unique Hotel and Resorts, Khulna Power Company Ltd, National Bank Ltd, RN Spinning and Titas Gas.