Banking stocks propel DSE higher, turnover crosses Tk500cr after three weeks

Infographic: TBS

The stock market extended its recovery today (4 January), led by a strong rally in banking shares that lifted the benchmark index and pushed turnover above the Tk500 crore mark for the first time in 14 trading sessions. 

Renewed buying interest in heavyweight bank stocks helped sustain the market's upward momentum, even as several other sectors showed mixed performance, according to the market insiders.

The Dhaka Stock Exchange's benchmark DSEX gained 54 points, or 1.11%, to close at 4,965, marking its third consecutive session of gains. Over the past three days, the index has added a total of 104 points, reflecting improving sentiment among investors. The blue-chip DS30 index also advanced, rising 18 points or nearly 1% to settle at 1,887.

Turnover surged sharply, climbing 46% from the previous session to Tk537 crore, as trading activity intensified across the market. This was the first time daily turnover crossed the Tk500 crore threshold in three weeks, signalling a tentative return of liquidity. 

Despite the higher trading volume and rising indices, total market capitalization edged down slightly by Tk144 crore, indicating selective buying rather than a broad-based rally.

Banking stocks were the clear drivers of the session. Of the 36 banks listed on the DSE, five remain suspended from trading due to their merger into a new bank. Among the remaining 31 banks, all recorded price gains except United Commercial Bank, whose share price remained unchanged. 

Several bank stocks posted near double-digit gains, including Islami Bank, AB Bank, Rupali Bank and NRB Bank, while Pubali Bank and Southeast Bank also attracted strong buying interest.

Financial institutions and services also posted solid gains, reflecting investor preference for large-cap and fundamentally significant sectors. In contrast, travel, jute and information technology stocks came under pressure, dragging down their respective sector indices.

According to EBL Securities, the capital market carried forward its positive momentum from the previous session, buoyed by New Year optimism and expectations of improved clarity on the political front. 

The brokerage said optimistic investors repositioned their portfolios towards heavyweight banking stocks, anticipating a moderation in prevailing uncertainties. Strong accumulation in large-cap bank shares provided steady support to the market throughout the session, helping indices maintain their upward trajectory.

Sector-wise turnover data also highlighted the dominance of banking stocks, which accounted for over 23% of total turnover. Pharmaceuticals and textiles followed, contributing nearly 14% and 12% respectively, underscoring selective sectoral interest rather than broad-based participation. 

Orion Infusion, City Bank, Uttara Bank, Saiham Cotton and Anwar Galvanizing emerged as the most actively traded stocks of the day.

However, not all stocks shared in the rally. Several recently downgraded Z-category companies faced sharp corrections, with Gemini Sea Food, Alif Industries, Beach Hatchery, Fu Wang Food and Best Holding each losing close to 10% of their value, reflecting continued investor aversion to high-risk stocks.

The Chittagong Stock Exchange mirrored the positive trend seen in Dhaka. The CSCX index rose 75 points to close at 8,515, while the CASPI index jumped 127 points to end the session at 13,819. Turnover on the port city bourse stood at Tk26.90 crore.