The stock market ended higher on Monday as investors chased sector-wise stocks, particularly of insurance companies, after the central bank removed the interest rate cap.
The Bangladesh Bank lifted the interest rate ceiling and replaced it with a market-driven reference rate to be regulated by the average Treasury bills rate.
Investors believe higher interest rates generally help increase the cash-surplus insurance companies' financial income.
As a result, insurance stocks, after a week-long depression, have drawn investors' attention. Many investors found oversold insurance stocks lucrative for capital gains.
The insurance sector led the indices upward, occupying all the positions of top 10 gainers.
The profitability of banks and financial institutions will increase as per the new monetary policy, market analysts said. However, no impact of monetary policy was seen on bank stocks in the market.
The market opened higher with buyer dominance throughout the session as opportunist investors sought quick gain opportunities in the beaten-down stocks.
DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), finally went up by 33.08 points to settle at 6,314, after remaining flat the day before.
The market witnessed heavy sale pressures last week from jittery investors who took cautious stance before the monetary policy announcement.
Stocks started to recover from the recent downbeat vibe as the monetary policy statement somewhat alleviated confidence across the trading floor, said EBL Securities.
Turnover, an important indicator of the market, however, remained low, although it rose 27 per cent from the previous day to Tk 5.33 billion.
The life insurance sector accounted for more than 23 per cent of the day's total turnover with four life insurance companies in the top 10 turnover chart.
Major sectors showed mixed performance with life insurance posting the highest 5 per cent gain, followed by general insurance 4.4 per cent.
Most of the traded issues saw price appreciation as 146 issues closed higher, 29 ended lower and 180 remained unchanged on the DSE floor.
Meghna Life Insurance became the most-traded stock with shares worth Tk 282 million changing hands, followed by Navana Pharma, Sonali Life Insurance, Rupali Life Insurance, and City General Insurance.
The DS30 Index, which consists of blue-chip companies, also rose 5.35 points to 2,188 and the DSES Index, which represents Shariah-based companies, gained 6.43 points to 1,370.
The Chittagong Stock Exchange (CSE) also ended higher with the CSE All Share Price Index (CASPI) gaining 80 points to settle at 18,635 and its Selective Categories Index (CSCX) rising 46 points to close at 11,141.
The port city's bourse traded 2.87 million shares and mutual fund units with a turnover value of Tk 129 million.
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