Banking rally lifts DSEX to four-month high

The country's stock market staged a strong comeback yesterday, as a broad-based rally led by banking stocks pushed the benchmark index to its highest level in nearly four months and lifted total market capitalisation above Tk7 lakh crore for the first time in three months.

The DSEX, the prime index of the Dhaka Stock Exchange (DSE), jumped 54 points, or 1.04%, to close at 5,247, marking its strongest single-day gain in recent weeks. 

The blue-chip DS30 index also moved firmly into positive territory, rising 20 points, or 1.03%, to settle at 2,017, reflecting renewed investor confidence in large-cap stocks.

Market participation improved notably, with 215 issues advancing against 107 decliners, while 68 stocks remained unchanged. Turnover surged by 19% to Tk746 crore, crossing the Tk700 crore mark for the first time in four months. 

The rise in trading activity signalled a return of buying interest after a prolonged period of cautious sentiment, as investors selectively accumulated fundamentally strong stocks, particularly in the banking sector.

Market analysts believe the banking-led rally could continue in the near term if turnover remains strong and macroeconomic signals stay supportive. 

However, they cautioned that sustained gains would depend on clear improvements in liquidity conditions, earnings visibility and policy clarity. For now, yesterday's session provided a significant psychological boost, as the DSEX reclaimed key levels and overall market capitalisation once again crossed the Tk7 lakh crore mark.

According to EBL Securities, the capital market extended its upward momentum for a second consecutive session, with heightened participation and sustained buying in banking shares propelling the benchmark index to a near four-month peak.

From the start of the session, the market maintained a positive tone, driven largely by large-cap banking stocks amid expectations of improved economic activity and a potential revival of private-sector investment following upcoming electoral developments, according to the review.

This upbeat sentiment gradually spread across other key sectors, resulting in broad-based gains throughout the trading session. 

EBL Securities noted that investors appeared more willing to take positions in beaten-down stocks, encouraged by relatively attractive valuations and hopes of policy stability in the coming months.

Banking stocks lead gains

Banking stocks emerged as the clear market leaders, posting the highest sectoral gain of 2.57% for the day. Strong buying interest was observed in several major lenders, with Islami Bank, Al-Arafah Islami Bank, Midland Bank and AB Bank featuring prominently among the top gainers. 

Islami Bank surged nearly 10%, while Al-Arafah Islami Bank rose close to the upper circuit limit, underscoring the renewed appetite for banking shares.

Other large-cap sectors also contributed to the rally, although to a lesser extent. Non-bank financial institutions advanced by more than 2%, while food and allied, telecommunication and pharmaceutical sectors closed in positive territory. 

Market observers said the banking rally played a pivotal role in restoring overall confidence, as the sector is often seen as a proxy for broader economic health.

Turnover data further highlighted the dominance of banking stocks in yesterday's rally. 

BRAC Bank, City Bank and Islami Bank ranked among the most actively traded shares, reflecting strong participation from both institutional and retail investors. Insurance and manufacturing stocks such as Pragati Life Insurance and Simtex Industries also featured among the turnover leaders.

Despite the broadly positive session, some stocks faced selling pressure. Meghna Pet, DBH First Mutual Fund and New Line Clothings were among the notable laggards, while power and tannery stocks also saw mild corrections.

Analysts said such movements were expected amid profit-taking in select counters after recent gains.

The upbeat trend was mirrored at the Chittagong Stock Exchange, where both major indices closed higher. The CSCX advanced 72 points to 9,106, while the CASPI rose 111 points to finish at 14,691, although turnover at the port city bourse remained modest at Tk8.71 crore.