Stocks spiraling down over a volatile November gained momentum in the last two consecutive sessions as bargain hunters cautiously tried to bag some oversold shares.
Hitting a 15-week low of 6,173 on Tuesday morning, DSEX, the broad-based index of the Dhaka Stock Exchange (DSE) bounced back on the same day continuing its slow recovery till the closing bell on Wednesday, to a nine-day high of 6,235.
Daily turnover had dropped to Tk300-400 crore in a bearish market that left more and more stocks stuck on the floor.
But in the last session of the month, turnover increased 34.5% to Tk449.4 crore as many investors bought some large-cap stocks at or slightly above the floor price.
"DSE indices continued their gains for the second straight session. Bargain hunters who took positions on sector-specific scrips at lucrative prices, propelled the market recovery," according to the daily market commentary of EBL Securities.
The month-long volatility
However,the two recovering sessions were not enough to totally recoup what the DSEX and most of its active constituents lost over the month as the index declined 1.1% in a month.
In October, the DSEX dropped 3.2% when investors reacted to corporate disclosures reflecting the challenges faced by companies because of macroeconomic troubles – high inflation, cost hikes, and a soaring dollar.
Over half of the listed firms faced earnings deterioration in the last two quarters.
Most of the stocks, which rallied sharply since the imposition of floor prices, suffered sharp corrections in the last leg of the market downturn.
Prices of Orion Infusion, Eastern Housing, Orion Pharma, SinoBangla, Sonali Paper, Kohinoor, ADN Telecom, Intraco Refuelling, and KDS Accessories, corrected by 15%-50% in the last one month.
On the other hand, Pragati Life Insurance, Aamra Networks, Jute Spinners, Genex Infosys, Apex Foods, BD Welding, Bangladesh General Insurance Company, and Advent Pharma, generated 20%-70% returns in a month.