Large-cap support helps DSEX end flat as insurance stocks continue to bleed
However, the blue-chip DS30 index edged down slightly to 2,208 points, reflecting a selective approach by investors who preferred to stay on the sidelines ahead of potential regulatory shifts.
The country's premier bourse ended on a largely flat note yesterday as buying support for sector-specific large-cap scrips provided a necessary cushion against a persistent sell-off in the insurance sector.
The benchmark DSEX index of the Dhaka Stock Exchange (DSE) inched up marginally to settle at 5,857 points, effectively pausing a broader market correction that had emerged in recent sessions.
However, the blue-chip DS30 index edged down slightly to 2,208 points, reflecting a selective approach by investors who preferred to stay on the sidelines ahead of potential regulatory shifts.
The day's trading session was characterised by significant intraday volatility. Market analysts from EBL Securities noted that the indices opened under pressure but managed to stabilise as opportunistic investors took positions in fundamentally strong large-cap stocks. The broader sentiment, however, remains watchful as market participants await the finalisation of proposed revisions to margin lending rules. This cautious stance was further compounded by renewed geopolitical tensions in the Middle East, which weighed on the risk appetite of institutional and high-net-worth investors.
Keep updated, follow The Business Standard's Google news channel
Sheltech Brokerage Limited observed that while selling pressure dragged the benchmark index to an intraday low of 5,855 points during the morning hours, a recovery emerged from the mid-session onwards. This turnaround was primarily driven by selective buying in banking stocks, fueled by positive expectations surrounding the upcoming half-year earnings season. Additionally, investors are calculating potential benefits for certain sectors under the draft margin rule amendments currently being reviewed by the securities regulator.
On the sectoral front, returns remained mixed with a stark contrast between performers and laggards. The Service and Real Estate sector emerged as the top gainer, posting a 2.28% return.
Conversely, the Insurance sector was the day's worst underperformer, shedding 2.31% of its value.
Market insiders attributed the heavy selling in insurance scrips to growing fears among investors that many of these companies might be excluded from margin loan eligibility under the new proposed price-to-book value criteria.
Despite the price fall, turnover remained concentrated in textiles, pharmaceuticals, and insurance, which collectively accounted for nearly half of the day's total trading volume.
Market participation saw a 10% decline compared to the previous session, with total turnover settling at Tk966 crore.
The market breadth also remained negative, as 182 issues declined against 148 that managed to advance, while 58 scrips remained unchanged on the DSE floor.
Among individual performers, mutual funds like LR Global Mutual Fund One and MBL First Mutual Fund hit the upper limit of the circuit breaker, while Sonargaon Textile and NCCBL Mutual Fund-1 also featured prominently on the gainers' list.
On the flip side, the losers' chart was dominated by insurance firms, including Provati, Karnaphuli, Takaful, and United Insurance.
The bearish sentiment in specific sectors was also reflected at the Chittagong Stock Exchange (CSE), where the Selective Categories' Index (CSCX) ended 23 points lower at 9,615, and the All Share Price Index (CASPI) dipped by 10 points to settle at 15,738.
