Stocks endured erosion for the second consecutive day on Tuesday as risk-averse investors preferred to bag profits on quick-gaining shares.
The market opened sharply lower and the downturn persisted throughout the session as sellers continued their dominance to realize their recent gains in apprehension of a probable shift in market momentum.
The DSEX, the prime index of the Dhaka Stock Exchange (DSE), finally went down more than 64 points or 1.08 per cent to settle at 5,868. The DSEX shed 148 points in the past two sessions.
Market experts said the correction was due to profit taking on stocks that saw significant appreciation in recent times.
The key index gained 786 points or 15 per cent in just four days to Sunday, reaching a five-month high after the fall of Sheikh Hasina on August 5 in the wake of a mass uprising.
"Stocks registered downbeat for two days as investors continued their profit booking selloffs amid weakening market momentum," said EBL Securities.
Most stocks had gone up by more than 15 to 20 per cent after the ouster of the former prime minister and cautious investors decided to take the profit. That, according to experts, was a positive thing because when investors make profits they get confidence to invest more.
"The market soared irrationally after the government fell due to over enthusiasm, so this profit booking tendency should be of no surprise," said Saiful Islam, president of the DSE Brokers Association of Bangladesh.
On the bright side, buyers continue to stay engaged in the market, he said, adding that investors regained their confidence and so fresh funds were coming in.
The market turnover stayed above Tk 10 billion for the last four trading days as investors were active on both sides of the trading fence.
The banking sector dominated the turnover chart, capturing 24 per cent of the day's total turnover, followed by pharmaceuticals and textile sectors.
The top index draggers were Islami Bank, Square Pharma, Beximco Pharma, Bangladesh Steel Re-Rolling Mills, BAT Bangladesh and Eastern Bank. These six stocks jointly caused half of the index fall.
Islami Bank, which took off from the floor on Wednesday after 15 months, gained more than 36 per cent in the four days to Monday. It lost 5.64 per cent on Tuesday from the day before and rendered a 12-point index fall.
Islami Bank is among the six companies with floor price still in effect.
The blue-chip index DS30, a group of 30 prominent companies, fell 19 points to 2,134 while the DSES index, which represents Shariah-based companies, dropped 15 points to 1,255.
All the large-cap sectors showed negative performance. The engineering sector experienced the highest loss of 2.81 per cent, followed by non-bank financial institutions, food, power, banking, pharma, and telecom sectors.
Losers took a strong lead over gainers. Out of 399 issues traded, 269 saw price erosion, 106 closed higher and 24 remained unchanged on the DSE trading floor.
BRAC Bank became the most traded stock with shares worth Tk 539 million changing hands, followed by Square Pharma, Unilever Consumer Care, Renata, and IFIC Bank.
National Tubes was the day's top gainer, posting a 10 per cent rise while Islami Bank was the worst loser, shedding 5.6 per cent.
The Chittagong Stock Exchange also ended lower with its All Shares Price Index (CASPI) losing 148 points to close at 17,009 and the Selective Categories Index (CSCX) shedding 90 points to 10,243.
Of the issues traded, 168 declined, 58 advanced, and 16 issues remained unchanged on the CSE.
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