Stocks sluggish after four recovering sessions
Stock brokers said market optimism that was growing due to the previous sessions’ gains began to disappear as soon as the indices started a bumpy ride from the early hour of the trading session on Wednesday
Stocks went slow on Wednesday following four sessions of recovery efforts.
Indices at both the bourses at Dhaka and Chattogram closed lower amid a moderate decline of investors' participation in trading.
"A majority of investors were pessimistic as they remained confused about the market direction," said EBL Securities in its daily market recap report.
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"The cautious selling approach took control over the bourses which pushed the market to end in red terrain at the end of the day-long volatility," it added.
Stock brokers said market optimism that was growing due to the previous sessions' gains began to disappear as soon as the indices started a bumpy ride from the early hour of the trading session on Wednesday.
Some recovery efforts made during the middle of the session failed as the DSEX – the broad based index at the Dhaka Stock Exchange (DSE) – nosedived at the later part of the trading session.
Finally, DSEX closed 0.37% lower at 5,488 points, while DS30, the blue-chip index fell by 0.75% and Shariah-index DSES was down by 0.25%.
Out of the 356 scrips traded, 131 advanced, 126 declined, and 99 remained unchanged.
Cautious investors pushed the day's trading turnover down to Tk776 crore from Tk834 crore on Tuesday.
Turnover at the Chittagong Stock Exchange (CSE) declined by 2% to Tk32.8 crore on Wednesday, while its major indices including the broad index CSCX fell by 0.6%.
On the sectoral front, miscellaneous occupying 21.36% of the day's trades, pharmaceuticals and chemicals 14.12% and telecommunication 10.18% of the DSE turnover were the most active sectors.
Most of the sectors observed mixed performance, out of which telecommunication gained 1.8% in market capitalisation, IT 1.7% and general insurance 1.2%.
However, the losing sectors led by services, engineering and cement have faced the biggest corrections.
Dhaka and Chattogram's stock indices seem to have been tired since mid-January this year following nearly 50% gains over the previous seven months and the market has been in a correction phase for the last seven weeks, of which there were only two green weeks.
However, the recent correction is yet to erode the entire gains the indices observed over the first three weeks of January and all the indices are demonstrating at least some year-to-date gains.
DSEX is still 1.59% up in 2021 following a 58% gain in 2020.
Despite facing some sell pressure in recent weeks, the big gains over the previous several days helped DS30 demonstrate a 6.54% year-to-date gain.
On the other hand, Shariah Index DSES is almost flat with a mere 0.04% year-to-date gain.
According to the UCB Stock Brokerage market report, the average price to earnings ratio at the DSE is at 15.9 now, which theoretically explains that corporate earnings alone can pay back investors' total input within less than 16 years.
