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Stocks slump as large-cap issues face correction

Eight out of top 10 gainers belong to mutual fund sector

FE REPORT | November 11, 2020 00:00:00

Stocks drifted lower on Tuesday, after remaining flat in the previous day, as risk-averse investors went on profit booking sell-offs on large-cap issues.

DSEX, the key index of the Dhaka Stock Exchange, went down by 28.43 points or 0.57 per cent to settle at 4,899, after adding more than 4.0 points in the previous session.

Market operators said investors opted for booking profit on large-cap stocks which saw significant gain in the past few sessions.

Price fall of large-cap stocks like Investment Corporation of Bangladesh, Grameenphone, United Power, Beximco Pharma and British American Tobacco contributed most to the index fall.

These five companies jointly accounted for more than 18 points fall of DSE key index on Tuesday.

After hovering around 4,900 points for the last few days, stocks witnessed a sudden fall in indices, which made investors more cautious, said a merchant banker.

He noted that many investors moved to the primary market as three IPOs, one is biggest ever, is set to hit the market. Many investors have already disposed of shares of other companies, while some are collecting funds to join the IPO bonanza.

Profit-booking in major stocks, which attracted the recent rally, dragged the market down while recent corporate declaration enticed some portfolio realignment activities, commented EBL Securities.

Two other indices also ended lower. The DS30 index, comprising blue chips, lost 16.53 points to finish at 1,703 and the DSE Shariah Index fell 8.35 points to close at 1,112.

Turnover, a crucial indicator of the market, stood at Tk 9.25 billion, which was 5.0 per cent higher than the previous day's turnover of Tk 8.81 billion.

Top gainer lists were dominated by mutual fund units as eight out of top 10 gainers belong to the mutual fund sector and the sector gained 4.20 per cent.

Among the major sectors, non-bank financial institutions witnessed the highest correction, losing 3.80 per cent, followed by power with 1.20 per cent and telecom 0.70 per cent.

On the other hand, engineering sector posted the highest gain, advancing 1.30 per cent, followed by food with 0.80 per cent, pharma 0.70 per cent and banking 0.40 per cent respectively.

Losers took a modest lead over the gainers as out of 355 issues traded, 139 ended lower, 129 higher while 87 issues remained unchanged on the DSE trading floor.

A total number of 167,418 trades were executed in the day's trading session with a trading volume of 371.12 million shares and mutual fund units.

The market capitalisation of DSE also fell to Tk 3,980 billion on Tuesday, from Tk 3,997 billion in the previous session.

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