Profit booking pulls down stocks after six gaining sessions

After gaining for six consecutive sessions, stocks faced correction on Sunday, with the daily turnover rising 21.5% to an 11-month high of Tk2,296 crore on the Dhaka Stock Exchange (DSE).

The market opened on a bullish note which continued till 11.00 am, and then slid down due to profit booking pressure.

DSEX, the broad-based index of the premier bourse, closed 0.29% lower at 6,489, which had jumped to 6,585 in the morning.

The index ceased in its upward momentum after adding 228 points in the past six sessions, as investors went on to profit-booking, taking advantage of the recent bullish trend in the market, wrote EBL Securities in its daily market commentary on Sunday.

Also, a sudden rumour that the securities regulator might withdraw the price floor anytime added to the selling pressure, said stockbrokers.

In August, the DSEX rose 5.3% from its 14 month-low following reintroduction of a price floor by the Bangladesh Securities and Exchange Commission that allowed no stock to trade below the floor price.

On top of the floor impact, the expectation of an improving macroeconomic situation helped in the recent leg of market recovery, while the gains in recent days lured many investors to book some profits and buy other stocks for a better return, said analysts.

On Sunday, of the 386 issues traded at the DSE, 95 advanced, 217 declined, and 63 remained unchanged.

Travel and leisure, with a 3.1% gain, led the winning sectors on Sunday, followed by jute and fuel-power.

Life insurance, textiles, and cement led in market capitalisation contraction.

Engineering contributed the most, 16.2% to the daily turnover, followed by pharmaceuticals and textiles.

Indices at the Chittagong Stock Exchange (CSE) also closed lower on Sunday following similar intraday volatility.

Turnover at the port city bourse declined to below Tk36 crore on Sunday, from over Tk65 crore in the previous session.