DSEX falls below 5,700 mark after 35 months

Dhaka stocks are failing to find solid ground owing to waning investor confidence and liquidity challenges amid global economic uncertainty.

DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), dipped below the 5,700 mark for the first time since May 11, 2021, with a 1.34% decline to 5,687 points during Thursday's session.

Indices witnessed a plunge in four consecutive trading sessions as the losing investors continued to sell their holdings.

Nearly all stocks experienced a sharp decline Thursday morning and continued to plummet as investors rushed to reduce exposure amid worsening market conditions.

Market insiders and stock analysts attribute the downturn to the increasing interest rates, which have rendered fixed-income instruments more appealing than stocks.

As a result, investors stand to lose more money amidst the continuous market decline. Conversely, holders of government treasury bonds and bills are poised to enjoy favourable returns, they said.

The stock market is experiencing heightened volatility due to global economic uncertainties stemming from the fresh conflict between Iran and Israel, said analysts.

Also, the crisis in investor confidence is worsened by regulatory uncertainty and upcoming tax policies, making it difficult for investors to make informed decisions.

During Thursday's session, the blue-chip index DS30 dropped by 23 points settling at 1,985 and the DSES Index decreased by 16 points to 1247.

Among the stocks traded, 29 advanced, 342 declined, and 24 remained unchanged.

However, turnover slightly increased to Tk522.51 crore, compared to Tk482.53 crore in the previous session.

Asiatic Laboratories, Dutch-Bangla Bank, captured the DSE top gainer list followed by Salvo Chemical Industry, Heidelberg Cement Bangladesh, IFAD Autos, Best Holdings, and HR Textile Ltd.

On the other hand, Fareast Finance and Investment, and Zahintex Industries captured the DSE top loser list followed by Capitec Grameen Bank Growth Fund, Alltex Industries, Khulna Printing & Packaging, and IDLC Finance PLC.

At the DSE, the top five most traded stocks were Asiatic Laboratories, Best Holdings, Taufika Foods, Alif Industries, and Golden Son Ltd.

EBL Securities wrote in its daily market commentary that Dhaka stocks logged continuous hurdles owing to the depressed market sentiment as investors remained apprehensive over concerns regarding the market outlook, while the benchmark index tumbling below the 5,700 mark after three years has deepened further uncertainty among investors.

The market observed a downward trend throughout the session, caused by the predominant selling pressure across the trading floor since jittery investors are rattled by the rising tensions over the Middle-East geopolitical crisis and its probable economic impacts that can potentially affect the market outlook, the brokerage house said in its commentary.

Moreover, the market has been wading through a prolonged downbeat vibe, and such subdued market sentiment has yet to rebound until there are significant catalysts to counter the prevailing pessimism pervading across the trading floor, the house further said in its commentary.

In terms of sector performance, the Pharma sector dominated with a turnover of 19.5%, followed by Textile at 13.3% and Food at 12.0%.

Most sectors showed poor returns, with Financial Institutions (3.4%), Paper (3.1%), and Mutual Funds (2.5%) experiencing the most significant corrections on the market today. Only the Travel sector (1.6%) saw marginal positive returns.

The port city bourse, Chattogram Stock Exchange, also settled on red terrain. The selected indices (CSCX) and All Share Price Index (CASPI) declined by 130.9 and 215.0 points, respectively.