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The Dhaka bourse on Thursday turned overly upbeat just a day after it showed the highest correction of the prime index in about five years without any significant change on economic or geo-political front.
A majority of the stocks recovered from the heavy loss that they endured the day before for panic-driven sales over the India-Pakistan conflict. The DSEX, broad index of the Dhaka Stock Exchange (DSE), regained 100 points on Thursday to close at 4902 points. It had lost 149 points in the previous session.
The quick recovery was as devoid of rationale as the sharp correction was.
The tension between India and Pakistan did not escalate nor did it die down over Tuesday's airstrike by India on nine sites in Pakistan in a retaliatory move against the April attack by gunmen on tourists on the India-controlled side of the disputed Kashmir.
Asked about the market's reaction on Wednesday, Md. Moniruzzaman, managing director of Prime Bank Securities, said investors become jittery in a market where the majority of listed securities are fundamentally weak.
"Panic or rumours spread quickly. Investors follow one another to take positions or evade any possible loss.
"At the end of the day, they might have thought why they had sold stocks in a situation where the market of India that is directly at war closed in the positive," said Moniruzzaman.
So, it took nothing for an overnight shift in investors' attitude towards the market.
The companies, which are fundamentally strong, did not see massive corrections on Wednesday.
The day after DS30 comprising blue chip stocks regained 2.50 per cent or 26.28 points to close at 1074.27 points.
On the other hand, weak companies usually hit the lower circuit breaker following any kind of abrupt situation. They also make it to the top of gainers' list for no good financial backing.
The junk stock of Khulna Printing & Packaging, which reported losses for the five years to FY24, became the number one gainer with a rise of 10 per cent to Tk 18.70 each share on the DSE on Thursday.
The other two junk stocks, which were on the list of top 10 gainers on the day, are scam-hit International Leasing & Financial Services and Peoples Leasing and Financial Services.
Of them, International Leasing & Financial Services experienced substantial amounts of losses between Tk 1.78 billion and Tk 2.45 billion in FY19-23.
People's Leasing and Financial Services reported a loss of Tk 5.66 billion for FY19 and the amount rose to Tk 6.37 billion in FY20. The company's loss declined to Tk 3.17 billion in FY23.
At the end of Thursday's session, 377 out of 394 stocks closed in the green zone while 10 declined and seven were unchanged on the premier bourse.
Due to mounting sale pressure, a majority of the listed securities plunged on Wednesday. The DSE broad index lost 3.01 per cent or 149.30 points to close at 4802.41 points, the lowest level since August 25, 2000.
Thursday's lower turnover -- Tk 3.66 billion -- featured by the DSE indicates that the previous day's turnover worth Tk 5.16 billion was generated mainly by heavy sell-offs over concerns over further escalation of the regional tension.
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