Investors went after the banking stocks yesterday pinning hopes on the higher profits posted by banks in the last quarter, resulting a 33.67-point rise in the benchmark general index of the Dhaka Stock Exchange.

Stock prices of 29 out of the listed 30 banks rose on the day when the DSEX increased 0.69 per cent to 4,905.

As banks are the biggest sector in the stock market, so its upward trend impacted the index positively, said a stock broker.

Most of the listed banks witnessed higher profits in the July-September quarter of 2020 and the possibility of it to continue in the next quarter also encouraged people to buy banking stocks, he said.

People believe they will be able to make more profits by investing on banking stocks or bonds as the lenders' deposits continued rising during the pandemic, he said.

Deposits at banks rose 10.49 per cent year-on-year to Tk 1,305,453 crore in the last fiscal year on the back of rules around national savings certificates and record flow of remittance.

Banking stocks were on an upward trend as a rumour is now floating in the market that the gamblers will start playing with the stocks soon, said Abdul Halim, a stock investor, who bought banking stocks yesterday.

"I think the banking sector will face a big blow next year when they will have to keep provision against substandard loans."

"Even after that I chose banking stocks, because still the stocks are undervalued and the companies will pay higher dividends for 2020," Halim said.

However, an analyst of a reputed asset management company said most of the banks are overvalued because their real asset value is very poor.

The banking and non-banking financial sector is now struggling with non-performing loans, which might get worse due to the impact of the pathogen, he said.

So, the investors should be careful, the asset manager added.

Turnover, one of the important indicators of the stock market, hit Tk 790.9 crore yesterday, up from Tk 790.1 crore on the previous day.

ICB AMCL Second Mutual Fund topped the gainers' list with a 10 per cent rise followed by Miracle Industries, Hakkani Pulp, Associated Oxygen and Appollo Ispat.

Beximco Pharmaceuticals was the most traded stocks that traded worth Tk 63.9 crore followed by Brac Bank, Beximco Ltd, Asia Insurance and Grameen One: Scheme Two.

Of the total 357 traded companies, 149 advanced, 127 declined and 71 remained unchanged.

Renata shaded the most that lost 11.13 per cent yesterday followed by Prime Finance First Mutual Fund, Exim Bank First Mutual Fund, NCC Bank First Mutual Fund and CAPM BDBL Mutual Fund.

The Chattogram Stock Exchange also witnessed an upward trend in its index.

CSEX, the benchmark index of the port city bourse, rose 68 points, or 0.82 per cent, to 8,459.37 yesterday.

Out of the total 256 companies' stocks, 108 rose, 101 fell and 47 remained the same.