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Price fall of selective large- and mid-cap stocks dragged the market down on Monday, snapping a three-day winning streak, as investors preferred to realise short-term gains amid ongoing volatility.
Mostly, the stocks, which had price appreciations recently, eroded.
Sonali Paper & Board Mills, Sea Pearl Beach Resort, Olympic Industries, Green Delta Insurance, and Square Pharma, dropped 0.19 per cent to 2.42 per cent. These five companies accounted for more than 7 points fall of the prime index of the Dhaka Stock Exchange on Monday.
As a result, DSEX, the benchmark index of the DSE, went down 3.78 points to settle at 6,307, after gaining more than 20 points in the past three trading sessions.
Many investors opted to book quick gains on Monday after the prime index of the Dhaka bourse hit more than three weeks' high the day before, said market operators.
Turnover, a crucial indicator of the market, also slid to Tk 5.77 billion from Tk 6.11 billion on Sunday, which was the highest in the last one month.
Stocks failed to uphold the upbeat momentum as the market pulse shifted to correction mode, said EBL Securities.
The market has been bearish since the floor price was imposed more than a year ago, with some periodic upward movements that failed to sustain amid investors' confidence crisis.
Investors have been focusing on short-term bets as the prolonged volatility dampened their confidence in the market, Md Sajedul Islam, senior-vice president of DSE Brokers Association of Bangladesh.
He considers investors' preference for small-cap stocks, while strong fundamentally shares are stuck at floor prices, as a major barrier to bringing stability to the market.
Low-cap stocks, such as Miracle Industries, Eastern Insurance, Yeakin Polymer, Northern Insurance, Crystal Insurance, and Aramit Cement were on the list of top advancers on Monday.
Investors turned to small-cap stocks once again in the hope of higher returns from lower investments. These stocks, however, have insignificant impact on the index.
Miracle Industries' stock soared 9.95 per cent further to Tk 46.4 on Monday. It jumped 61 per cent in just two weeks following the company's disclosure of possible resumption of operation on September 30.
The stock started to see a price hike on August 17. The announcement, which was made on August 21, led to an escalation of the stock price.
Crystal Insurance's stock price soared 32 per cent in just two weeks which prompted the DSE to serve a notice asking the company if there was any reason behind the unusual rally.
The company said it had no undisclosed price-sensitive information.
The DS30 index, which consists of blue-chip companies, shed 3.30 points to 2,143 while the DSES index, which represents Shariah-based companies, fell 1.81 points to 1,372.
Investors were mostly active in the food sector, which captured 22 per cent of the day's total turnover, followed by general insurance (18 per cent) and miscellaneous (8 per cent).
Most of the traded stocks saw price erosion. Out of 324 issues traded, 1102 closed lower, 58 higher and 164 issues remained unchanged on the DSE trading floor.
Small-cap Fu-Wang Food kept its dominance in the turnover chart with shares worth Tk 657 million changing hands, followed by Eastern Housing, Gemini Sea Food, Rupali Life Insurance, and Yeakin Polymer.
The Chittagong Stock Exchange (CSE) also ended lower, with the CSE All Share Price Index (CASPI) losing 32 points to settle at 18,631 and the Selective Categories Index (CSCX) shedding 19 points to close at 11,139.
Of the issues traded, 62 declined, 32 advanced and 54 issues remained unchanged on the CSE.
The port city's bourse traded 3.21 million shares and mutual fund units with a turnover volume of Tk 131 million.