Stocks see minor correction after three-day rally

Stocks in Bangladesh saw a slight correction yesterday after a consecutive three-day rise, mainly due to a profit-booking tendency among investors.

Correction refers to a short- to medium-term decline of 10 percent or more, but less than 20 percent, in a major index or individual stock from its recent peak.

It acts as a market reset, revaluing overvalued assets back to their long-term trend, and is often considered a healthy, temporary pullback rather than a long-term recession.

The DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), fell 11 points, or 0.19 percent, to 5,589. The DS30, the index of blue-chip companies, dropped 9 points to 2,135, while the shariah-based DSES declined 8 points to 1,118.

With all the indices falling, DSE turnover also fell 1.4 percent, to Tk 1,257 crore. Among the traded stocks, 153 advanced, 218 declined, and 26 remained unchanged.

A top official of a leading brokerage firm said there was slight selling pressure on the well-performing stocks that had surged in the previous three trading days. Some of these companies advanced by 10 to 15 percent during that period, so it is common for investors to book profits.

As the turnover was high, it shows that there were enough buyers for these shares. A trend was seen in the market where low-performing companies have been rising for several days, including yesterday, which is not a good sign for the market, he added.

By rising around 10 percent, New Line Clothing, Bangladesh Industrial Finance, and S Alam Cold Rolled Steel Mills made it to the top gainers’ list. All three companies belong to the Z category.

On the other hand, ICB Islamic Bank, Prime Textile, and Ring Shine were the top losers, dropping 10 percent, 6 percent, and 5 percent respectively.

Although all indices of the DSE fell, the major index of the Chittagong Stock Exchange (CSE), CASPI, rose. It gained 7 points to reach 15,526. Among the traded issues, 116 rose, 90 fell, and 22 remained unchanged.