Stocks slip back into red as investors lock in gains after three-day rally

The Dhaka stock market slipped back into negative territory today (5 January) as investors moved to lock in gains following three consecutive sessions of advances, pushing the benchmark index lower despite selective buying in a few sectors.

Market participants said the mild correction was largely expected after the recent rally, which encouraged short-term investors to realise profits. The cautious mood prevailed through most of the session, limiting fresh buying interest and weighing on overall turnover.

The DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), fell by 10 points, or 0.20%, to close at 4,954, snapping its three-day winning streak. The blue-chip DS30 index also ended marginally lower, shedding one point to settle at 1,886.

Market breadth tilted towards decliners, with 189 stocks closing lower against 143 gainers, while 57 issues ended unchanged. Trading activity eased compared to the previous session, as turnover dropped by 10% to Tk485 crore. 

Brokers said the decline in turnover reflected a more cautious stance among investors following the recent rally, with many choosing to wait for clearer signals before taking fresh positions.

According to market insiders, selling pressure was primarily driven by profit taking in stocks that had seen sharp gains in recent sessions. Despite the overall decline, buying interest was visible in select counters, keeping the fall in the benchmark index relatively contained.

Stocks of Orion Infusion dominated the turnover chart, followed by Uttara Bank, Malek Spinning, Central Insurance and City Bank. These shares continued to attract active trading as investors repositioned their portfolios amid shifting market sentiment.

Sector-wise performance remained mixed. According to BRAC EPL Stock Brokerage Limited, most large-cap sectors posted negative returns during the session. 

Non-bank financial institutions and banking stocks recorded the steepest losses, each declining by 0.83%, as investors pared exposure to financials after recent gains. Engineering shares fell by 0.33%, while telecommunication, fuel and power stocks also ended slightly lower.

On the positive side, pharmaceutical stocks outperformed the broader market, gaining 0.71%, supported by selective buying in fundamentally strong companies. Food and allied stocks also managed a modest gain of 0.11%, offering some cushion to the broader index.

Among individual stocks, Pragati Life Insurance emerged as the top gainer, jumping 8.40%, followed by Familytex BD and Prime Finance, both of which rose more than 8%. Active Fine Chemical and Saiham Textile also posted notable gains as investors showed interest in select mid-cap and small-cap issues.

On the losing side, Alif Industries hit the circuit breaker, shedding 10%, while Beach Hatchery, S Alam Cold Rolled Steels, Kattali Textile and BD Welding Electrode suffered sharp declines amid selling pressure.

Meanwhile, the Chittagong Stock Exchange presented a mixed trend. Its benchmark CSCX index rose by 19 points to close at 8,535, while the CASPI index gained a similar 19 points to reach 13,839. However, trading activity at the port city bourse remained muted, with turnover plunging 68% to Tk8.67 crore.