DSEX extends decline for third straight session on profit booking

The indices of Dhaka Stock Exchange (DSE) experienced correction for the third consecutive session yesterday as the cautious investors book profit as brief gain on the trading floor amid lingering political uncertainty ahead of the February election.

The benchmark DSEX index shed 27 points to close at 5,072. The blue-chip DS30 index fell 15 points to 1,948, while the Shariah-based DSES index declined 8 points to end at 1,018.

Market turnover edged down by 1.68% to Tk527 crore, compared to Tk536 crore in the previous session. Of the 392 issues traded, 107 advanced, 225 declined and 60 remained unchanged.

Market insiders said the stock market is hovering near the bottom as political uncertainty continues to weigh on investor confidence. In this environment, informed investors are selectively buying fundamentally strong stocks but opting for small, short-term gains rather than waiting for sizeable returns. This trend has led to frequent corrections after brief upward movements.

Despite the current volatility, participants are expecting a positive trend either before or after the election.

Over the past year, political uncertainty and several decisions taken by the market regulator were not well received by investors. Many investors exited the market, while a large portion of institutional and high-net-worth investors remained largely inactive. This situation pushed down the prices of even fundamentally strong stocks.

Analysts said political uncertainty remains the single most critical factor influencing market sentiment. Although expectations are that easing uncertainty could lead to a more positive market direction, the lack of full clarity has kept institutional and large investors cautious, limiting trading volumes.

They added that ensuring policy stability and restoring investor confidence could unlock strong recovery potential for the capital market in the coming period.

All major large-cap sectors closed in negative territory yesterday. The Food & Allied sector recorded the highest decline, losing 1.01%, followed by NBFIs with a drop of 0.95%. The Engineering sector fell by 0.67%, while Pharmaceuticals declined 0.62%. The Fuel & Power sector shed 0.49%, Telecommunication slipped 0.39%, and the Banking sector posted the lowest loss among large caps at 0.25%. Meanwhile, block trades accounted for 1.9% of the total market turnover for the day.

The Chittagong Stock Exchange (CSE) also closed lower, with the CSCX index dropping 8 points to 8,821, and the CASPI index decreasing 13 points to close at 14,247 reflecting negative sentiment across both major bourses.