Blue-chip stocks lead market recovery after heavy sell-offs

Blue-chip stocks led a strong recovery in the capital market for the second consecutive session, helping the benchmark index of the Dhaka bourse rebound sharply after the recent heavy sell-offs triggered by geopolitical tensions in the Middle East.

The Dhaka Stock Exchange (DSE) benchmark index, the DSEX, gained 148 points today (10 March) to close at 5,290, extending a two-day rally that has recovered about 280 points, largely driven by gains in large-cap blue-chip stocks, particularly shares of the bank and telecom sectors.

Stocks suffered their highest single-day fall in six years on Sunday, the first trading session of the week, as escalating geopolitical tensions in the Middle East triggered panic selling across the market.

The index plunged 231 points, or 4.42%, to close at 5,008, hitting a two-month low and marking the biggest one-day decline since the Covid-19 pandemic era.

According to data, turnover at the Dhaka bourse increased by 42.7% to Tk593.7 crore as investor participation rose compared with the previous session's Tk416 crore.

Yesterday, trading began at DSE on a positive note as buying appetite surged. Throughout the session, buyers dominated the market.

By the end of trading, the DSEX, which reflects around 97% of the total market capitalisation, closed up 2.88%, or 148 points.

The other two major indices – DSES, the Shariah index, and DS30, the blue-chip index – also surged by 2.24% (23.24 points) and 3.18% (63 points), respectively.

The DS30 is constructed with 30 leading companies and is considered the exchange's investable index. It reflects around 51% of the total market capitalisation.

Among the traded stocks, 339 advanced, 13 declined, and 37 remained unchanged.

According to the LankaBangla Financial Portal, bank stocks contributed significantly to the rise in the indices. BRAC Bank pulled the DSEX up by 19 points, while Islami Bank Bangladesh added 14 points, Pubali Bank 5 points, City Bank 4.52 points, and Prime Bank 4.50 points.

Meanwhile, Square Pharmaceuticals contributed 11 points, and BAT Bangladesh added 6 points to the index.

In the previous session, Islami Bank Bangladesh, BRAC Bank, City Bank and Pubali Bank jointly lifted the DSEX by 54 points out of the total 132-point increase.

Although 36 banks are listed, trading is currently active for 31 banks, as the shares of five Islamic banks remain suspended following their merger into a single entity named Sammilito Islami Bank.

Share prices of 24 banks increased yesterday, while no bank stocks declined, and seven remained unchanged.

EBL Securities, in its daily market commentary, said the recovery momentum in the country's capital market extended for a second consecutive session, as investors took comfort from indications of a potential de-escalation in the Middle East conflict and easing concerns over immediate fuel supply shocks in the country.

"The market started with predominant buying pressure, and the momentum strengthened steadily as the session progressed, leading to broad-based price appreciation across most scrips for consecutive sessions," it said.

On the sectoral front, bank stocks accounted for the highest share of turnover at 24%, followed by the food sector at 15.5% and the pharmaceutical sector at 12.8%.

Pragati Life Insurance topped the gainer list, hitting the upper circuit, the highest single-day limit capped by the regulator, by 9.98% to Tk210.3 each.

It was followed by Asia Insurance by 8.30% to Tk37.8 each, Nahee Aluminum by 8.29% to Tk20.9 each, the First Janata Mutual Fund by 7.69% to Tk2.8 each, and Asia Pacific Insurance by 7.41% to Tk36.2 each.

While on the losing side, Metro Spinning Mills topped the loser list as its share price fell by 2.06% to Tk9.5 each, followed by Premier Cement by 1.89% to Tk36.3 each, and Newline Clothing by 1.75% to Tk5.6 each.

Meanwhile, the port city bourse, at Chittagong Stock Exchange, also settled in a positive territory.

Its Selective Categories' Index (CSCX) and All Share Price Index (CASPI) advanced by 206.8 points and 332.3 points, respectively.