Opportunists help rebound market after rumour driven stock plunge

The stock market rebounded on Wednesday after the biggest single-day fall in nearly seven months, driven by a rumour.
Investors got their doubts cleared and became convinced that no capital gain tax would be imposed at the individual level.
The recovery can be attributed to the fact that the upcoming income tax act will not apply any tax on capital gains from listed securities, market operators say.
The stock market, which had been gradually getting back its rhythm, suddenly saw a drastic fall on Tuesday as a rumor spread on the trading floor that the draft income tax law has a provision of capital gain tax for individual investors.
The upturn was observed from the beginning of the session on Wednesday as optimistic investors were active. The upbeat mood continued on the trading floor until the closure as they found some stocks at lucrative prices.
DSEX, the key index of the Dhaka Stock Exchange (DSE), finally went up by 22.80 points or 0.36 per cent to finish at 6,339, after losing over 40 points the day before.
The DS30 Index, which consists of blue-chip companies, also rose 0.47 points to 2,189 and the DSES Index, which represents Shariah-based companies, gained 3.04 points to 1,375.
Investors had their confidence restored after the issue of capital gain tax was resolved, said EBL Securities.
Buyers' dominance prevailed throughout the session as the previous day's sharp correction in the majority of issues created a bargain hunting opportunity, said the stockbroker.
However, cautious investors preferred to remain watchful and monitor the market momentum, which is evident from the low market participation.
Turnover, an important indicator of the market, dropped to two-week low to Tk 7.83 billion, a 28 per cent decline from the previous day.
Most of the sectors posted gains with the general insurance and life insurance experiencing the highest price appreciations. Nine out of top ten gainers were insurance companies.
Life insurance and general insurance sectors dominated the turnover chart as they jointly accounted for one-third of the day's total turnover.
The buying spree in general insurance, life insurance, cement, and IT sectors pulled the broad index, said International Leasing Securities.
Gainers took a strong lead over the losers, as out of 348 issues traded, 123 ended higher, 47 lower and 178 remained unchanged on the DSE trading floor.
Meghna Life Insurance topped the turnover chart with shares worth Tk 580 million changing hands, followed by Intraco Refueling Station, Rupali Life Insurance, RD Food and Sunlife Insurance.
The Chittagong Stock Exchange also bounced back with its All Shares Price Index (CASPI)-rising 35 points to close at 18,703 while the Selective Categories Index - CSCX advancing 18 points to close at 11,188.
Of the issues traded, 74 advanced, 46 declined and 90 issues remained unchanged on the CSE. The port city bourse traded 2.97 million shares and mutual fund units with turnover value of Tk 141 million.