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Stocks edge down as investors snap up quick gains

FE REPORT | July 11, 2024 00:00:00

Stocks slipped into the red on Wednesday, snapping a six-day rally, as cautious investors opted for booking profit.

Market insiders said stocks that had seen significant price appreciation in the last few trading days underwent correction on Wednesday.

Price erosion of Renata, Best Holdings, BAT Bangladesh, Khan Brothers PP Woven Bag Industries, and City Bank dragged the index significantly. They accounted for one-third of the day's index fall.

Renata slid about1 per cent after rising 23 per cent in the month prior while Best Holdings fell 2.76 per cent after gaining 14 per cent in a week. Khan Brothers' stock dropped almost 3 per cent after soaring 45 per cent in a week.

The market opened on a positive note, gaining 38 points within the first 30 minutes. But profit-booking sell-offs in large-cap sectors, particularly engineering, telecom, food, pharma and power sectors, wiped out the early gains.

Subsequently, the DSEX, the prime index of the Dhaka Stock Exchange (DSE), went down more than 26 points or 0.46 per cent to 5,568. It had gained more than 266 points in the previous six trading days.

Many stocks had gone up by more than 15 to 20 per cent in the past six sessions, and many investors decided to realize their gain. That, according to experts, was a positive thing because when investors make profits, they feel confidence and invest more.

However, according to EBL Securities, the market pulse returned to correction mode since investors preferred to remain watchful of the market's trend.

The blue chip index DS30, a group of 30 prominent companies, also fell more than 6 points to 1,958 while the DSES Index, which represents Shariah-based companies, dropped 4 points to 1,219.

Turnover, which indicates the volume of shares traded during the session, stood at Tk 9.67 billion, 5 per cent lower than the day before.

The pharmaceutical sector kept its dominance on the turnover chart, capturing almost 19 per cent of the day's total turnover, followed by food and textile sectors.

More than 67 per cent traded stocks saw price correction as out of 396 issues traded, 266 saw price fall, 98 closed higher and 32 remained unchanged on the DSE trading floor.

Beach Hatchery, which lost 1.08 per cent, became the most traded stock with shares worth Tk 392 million changing hands, followed by Orion Pharma, Sea Pearl beach Resorts, Intraco Refueling Stations, and Salvo Chemicals.

GQ Ball Pen was the day's top gainer, posting a 9.96 per cent rise, while Purabi General Insurance was the worst loser, shedding 3 per cent.

The Chittagong Stock Exchange also ended slightly lower with its All Shares Price Index (CASPI) losing almost 4 points to 15,885 and the Selective Categories Index (CSCX) shedding almost 2 points to 9561.

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