Stocks posted a significant gain on Monday, showing a sign of recovery, as investors put fresh bets on lucrative shares in anticipation of a potential turnaround.
Buyers dominated the trading floor throughout the session following the news that Prof Shibli Rubayat Ul Islam is set to be reappointed as chairman of the stock market watchdog for another four-year term.
The market jumped at the opening and remained upbeat until the end of the session with investors' renewed optimism in pharmaceuticals, engineering, textile and banking sectors.
Price hikes of Beximco Pharma, Beacon Pharma, BRAC Bank, Renata, and BAT Bangladesh helped the market's recovery. They jointly accounted for one-fourth of the key index rise.
The DSEX, the prime index of the Dhaka Stock Exchange (DSE), went up by more than 64 points or 1.10 per cent to settle at 5,860. The DSEX recovered almost 122 points in the past three trading days.
Market operators said the market extended its recovery mode as opportunistic investors sought bargain hunting opportunities in sector-specific stocks.
Many good stocks came to a lucrative price level after significant corrections in the past few weeks, which prompted investors to bet on beaten-down stocks, said EBL Securities.
Institutional buying support also added strength to the equity indices though the overall market sentiment remained subdued.
The Capital Market Stabilization Fund (CMSF) last week decided to disburse Tk 1 billion in low-cost loans to the stock market intermediaries to provide liquidity support to the moribund stock market.
"Although the loan amount is insignificant, the news boosted the confidence of the investors," said a stockbroker, adding that the news of reappointing the current chief of the securities regulator also encouraged a section of investors to put fresh bets on stocks.
Two other indices also ended higher. The DSE 30 index, comprising blue chips, saw appreciation by more than 18 points to finish at 2,033, while the DSE Shariah index advanced almost 15 points to 1,281.
However, trading activities remained sluggish, as turnover dropped 5 per cent further from the previous day to Tk 4.15 billion as cautious investors preferred to stay on the sidelines.
Most of the traded issues saw price appreciation as out of 392 issues traded, 316 saw price hikes, 36 witnessed price correction and 40 remained unchanged on the DSE trading floor.
Investors were mostly active in the banking sector, accounting for almost 19 per cent of the day's total turnover, followed by textile 15 per cent and pharma 14 per cent.
Low-cap companies continued to dominate the turnover chart. Alif Industries was the most traded stock, with shares worth Tk 178 million changing hands, followed by Lovello Ice-cream, Malek Spinning Mills, Shinepukur Ceramics, and Central Pharmaceuticals.
Deshbandhu Polymer was the day's top gainer, posting a 9.80 per cent rise while Northern Jute Manufacturing was the worst loser, losing 3.85 per cent.
The Chittagong Stock Exchange also ended higher with its All Shares Price Index (CASPI) gaining 73 points to 16,688 and the Selective Categories Index (CSCX) rising 42 points to 10,036.
Of the issues traded, 112 advanced, 27 declined and 15 others remained unchanged on the CSE.
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