Stocks march slower as central bank raises repo rate
The Bangladesh Bank in a predictable move on Sunday increased its policy rate, Repo, by 25 basis points to 5%, leaving the reverse repo rate unchanged at 4%
Supported by an extended leverage facility and the restrictions on downward movement of individual scrips, Dhaka and Chattogram stocks closed higher for the third consecutive session on Monday.
However, the momentum or breadth seemed to have calmed down to a rational level as investors opted for booking some profits in stocks that gained more in the two previous sessions.
Investors are keeping in mind the risks of market adversity due to deteriorating exchange rates and rising interest rates, said analysts and stockbrokers, adding that tendency to book some profits and hold some cash is being observed among many investors.
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The Bangladesh Bank in a predictable move on Sunday increased its policy rate, Repo, by 25 basis points to 5%, leaving the reverse repo rate unchanged at 4%.
EBL Securities wrote in their daily market commentary, "Dhaka stocks slowed down, after witnessing short-lived rallies driven by regulatory support as the rise of the policy rate made investors shaky on the trading board regarding decision making in capital market investments."
Having several swings over the session, DSEX, the key index of the Dhaka Stock Exchange (DSE), closed 19.3 points or 0.3% higher at 6,389.
"Though the market ended in green terrain, late-session sell pressure weighed on the upward rally and wiped early gains as investors saw every bounce-back in the market as an opportunity to sell," the EBL report reads.
Besides, bourses observed a slight increase in participation while turnover has increased by 0.3% to TK836 crore.
On the sectoral front, Pharmaceuticals, miscellaneous, and non-bank financial institutions contributed the most to the daily turnover.
Unlike the previous session's sharp gains, most of the sectors displayed mixed performance on Monday.
Banks, general insurance, and mutual funds generated positive returns, while travel-leisure, services and paper sectors faced the biggest corrections.
Out of the 385 issues traded, 163 advanced, 179 declined, and 43 remained unchanged in the DSE.
The Chittagong Stock Exchange (CSE) also ended in the green.
