The broad index of the Dhaka Stock Exchange (DSE) saw 214 points wiped out in just five minutes as the market opened on Sunday. Though it regained from that level, it settled at 96.50 points, or 1.52 per cent, down to 6,240 from the Thursday's session.
Against such a gloomy backdrop, the DS30 index, which comprises blue-chip companies, closed 7.48 points higher to 2,137; out of 30 blue chips 13 experienced price appreciations on the first day after removal of the price movement restriction that had been in place for 18 months.
The recovery of the benchmark index in the latter part of the day was mostly driven by the gains of the 13 blue chips.
Market experts said buying appetite of institutional investors in blue chip stocks helped the DS30 index close in the green zone despite the volatility in the market.
Stocks suffered a big jolt, owing to massive selloffs right from the start of the trading session. Investors wanted to get rid of their holdings that had remained stuck on the floor for a long period of time.
Two-third stocks suffered price erosion, whereas 13 blue chips that had almost no movement on the bourse for a lack of buyers in the 18 months saw a renewed interest in them.
Ahead of the trading session, the chief executive officer (CEO) forum, a platform of merchant banks and stockbrokers, had assured the regulator of supporting the market.
They might have thrown their weight behind stocks with good financial performance in keeping their promise to the regulatory authorities.
Welcoming the floor price withdrawal, Md Sajedul Islam, managing director of Shyamol Equity Management, said the correction was very much expected as a large number of stocks had failed to see price discovery for long.
Such an artificial price-controlling measure should never be repeated if the country wants a vibrant capital market, he said.
BRAC Bank took off from the floor after 14 months and closed at Tk 36.30 per share, gaining 1.40 per cent.
Investors showed buying interest in BRAC Bank as they deemed the price lucrative ahead of the dividend declaration.
The bank traded at Tk 32.30 to Tk 36.80 per share, with 4.93 million shares changing hands during the session.
BRAC Bank is still the top choice of foreign investors who account for a 30.20 per cent stake in the bank as of December last year.
It has reported a 53 per cent year-on-year growth in its consolidated profit for January-September to Tk 5.83 billion, as its interest income and return on investments rose significantly.
Another well-performing company, Square Pharmaceuticals, the flagship company of Square Group, saw a 0.85 per cent rise to Tk 213.8 per share, the highest in more than a year.
Square Pharma is considered one of the best performing blue-chip stocks, with an excellent business reputation.
The drug maker took off from the floor more than six months ago following a disclosure of a business deal that allowed another drug maker to produce some of its products to meet the growing demand.
Market insiders said investors injected money into Square Pharma, considering the market price low.
Among other blue chip stocks, Bangladesh Shipping Corporation, Eastern Housing, LafargeHolcim, Marico, and Olympic Industries climbed up on the DSE.
Meanwhile, the floor price is still applicable to 35 big-cap companies believed to be at a risk of freefall and have a huge impact on the index.
Minhaz Mannan Emon, ex-director of the DSE, said the market index loss was much less than what investors feared.
He attributed that to support from market intermediaries, such as the Investment Corporation of Bangladesh and stockbrokers and merchant bankers.
Before the lifting of floor prices, the Bangladesh Securities and Exchange Commission (BSEC) held a series of meetings with stakeholders and urged them not to create a sell pressure.
The CEO forum assured the regulator of buying shares worth at least Tk 10 million in each of their own portfolios.
Their support helped the market index recover, said Mr Emon, also managing director of BLI Securities.
He expected the market to rebound soon as most of the stocks already saw a correction of about 10 per cent. "Many stocks already came down to a lucrative price level," he added.
The daily turnover on the Dhaka bourse dropped 7.50 per cent from the previous day to Tk 5.89 billion.
The Chittagong Stock Exchange (CSE) also ended lower with the CSE All Share Price Index - CASPI - losing 476 points to 18,329.
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