DSE bounces back but low turnover reflects investor hesitation

The benchmark index of the Dhaka Stock Exchange (DSE) rebounded today (23 June) after two consecutive sessions of decline, though falling turnover signalled that many investors remained on the sidelines.

Market analysts said the recent price correction had created attractive entry points in fundamentally strong stocks, prompting fresh buying in select counters and pushing the index higher.

Despite the recovery, overall sentiment remained cautious, with many participants adopting a wait-and-see approach as they assessed the market's near-term direction. Trading activity weakened accordingly, with turnover falling below the previous session's level.

Gains were largely driven by buying interest in large-cap and fundamentally sound stocks, which offset selling pressure elsewhere. Analysts said continued accumulation of quality stocks could support further recovery, though subdued participation suggested investors remained wary of the broader market outlook.

The DSEX index of the Dhaka Stock Exchange rose by 51 points to settle at 5,605 yesterday. The blue-chip DS30 index increased by 17 points to 2,127, while the Shariah-based DSES index advanced 10 points to 1,139.

Market turnover stood at approximately Tk828 crore, marking a 5.48% decrease compared to the previous trading session. Out of the total issues traded, 279 advanced, 55 declined, and 61 remained unchanged, indicating broad-based positive market participation.

Market insiders said the sudden suspension of trading in the shares of two companies and the formation of an investigation committee to examine unusual price movements and trading activities in six companies negatively impacted investor sentiment. As a result, the market witnessed sustained selling pressure over the past several sessions.

According to them, such regulatory actions came at a time when investor confidence was gradually returning to the market. The decisions created uncertainty among investors, prompting many to adopt a cautious stance and increase selling, which weighed on overall market performance.

They argued that before investor confidence is fully restored, measures of this nature can have an adverse effect on market sentiment. While acknowledging the need for regulatory oversight of unusual price movements and suspicious trading activities, they believe the issues could have been addressed through alternative mechanisms that would have minimised disruption and avoided triggering negative reactions among investors.

In its daily market review, EBL Securities said the capital bourse resumed its upward trajectory as bargain hunters seized the opportunity to accumulate perceived undervalued scrips following two consecutive sessions of profit-taking, while the Finance Minister's recent reaffirmation of the government's commitment to the market's long-term development also supported a rebound in overall market sentiment.

According to the brokerage, although the market initially extended the previous session's selling pressure, sentiment improved as the session progressed, with buyers exerting sustained buying interest and driving broad-based price appreciation across the majority of listed scrips.

On the sectoral front, pharmaceutical stocks accounted for the highest share of turnover at 16.1%, followed by banking stocks at 12.3% and engineering stocks at 11.2%.

Most sectors posted gains during the session. The travel and leisure sector led the advance with a 4.5% return, followed by general insurance (3.8%) and financial institutions (3.4%). In contrast, the miscellaneous sector was the only major loser, declining 2.0%.

Meanwhile, the Chittagong Stock Exchange (CSE) also ended the day in positive territory. The Selective Categories' Index (CSCX) rose 4.6 points while the All Share Price Index (CASPI) gained 36.0 points.

BRAC EPL Stock Brokerage said in its daily market report that all major large-cap sectors closed in positive territory today. The non-bank financial institution (NBFI) sector led the gains with a 3.40% rise, followed by food and allied 0.91%, engineering 0.63%, fuel and power 0.62%, telecommunication 0.61%, pharmaceutical 0.57%, and banking 0.18%. Meanwhile, block transactions accounted for 3.7% of the day's total market turnover.