DSEX rallies to 27-week high as stocks attract fresh funds ahead of new fiscal year
Dhaka stocks regained momentum on Tuesday defying the recent volatility and DSEX – the broad-based index of the Dhaka Stock Exchange (DSE) – gained 0.39%, closing at 6306.18, the highest since 10 November 2022.
Stockbrokers said many high-net-worth individuals were in a mood to pour fresh funds into selective scrips after seeing many stocks rallying and generating short to mid-term returns over the recent weeks.
Also, the income tax rebate offered by the government against investments in listed securities attracted some taxpayers ahead of the end of the fiscal year, they added.
Reportedly, the government was planning to stop the income tax rebate on secondary stock investment while market groups dispute the plan and there has been an interpretation that investment in stocks would help avail tax rebate at least for this year if someone invests before the end of June.
The DSEX, hitting a 99-day high on Thursday, nosedived from the psychological resistance level of 6,300 and suffered a selloff till the middle of the Monday session, and investors were blaming the speculation of US sanctions before the upcoming national election.
However, stock investors' rotating appetite for a diversified range of shares, both sector-wise and capital-size-wise, kept helping the indices stay afloat and hit a new high during the closing bell.
For instance, insurance stocks that rallied sharply last week went through price correction till the middle of the Tuesday session and most bounced back at the end of the day.
On the other hand, some oversold large and mid-cap stocks including Unique Hotel, Genex Infosys, and Bashundhara Paper Mills gained to offset the impact of correction in other stocks.
"The premier bourse of the country sparked a rally in almost every sector based on investors' growing confidence owing to the recent rise in market participation, leading the core index to cross the psychological threshold of the 6,300-mark for the first time this year," EBL Securities wrote in its daily market commentary.
Turnover in the premier bourse surged 30% to over Tk920 crore.
Indices of the Chittagong Stock Exchange also had a strong turnaround on Tuesday, while turnover in the port city bourse fell 20% to less than Tk20 crore following a sharp spike in the previous session.