Banking rally pushes stocks up 1.67%
Stocks witnessed a significant jump today, marking the highest single-day gain in the last two months, driven primarily by a strong rally in the banking sector.
On the day, the benchmark index DSEX of the Dhaka Stock Exchange (DSE) rose by 1.67% or 82 points to close at 4,976, the highest level since 27 April. Today's gain extended the market rally for a third consecutive session.
The most recent highest single-day gain was 99 points, recorded on 8 May, according to DSE data.
Over the last three sessions, the DSEX has added 138 points, while the total market capitalization surged by Tk5,800 crore, reaching Tk6.68 lakh crore.
Keep updated, follow The Business Standard's Google news channel
Meanwhile, the blue-chip index DS30 rose by 36 points or 2%, settling at 1,873.
Out of the traded stocks, 278 advanced, 73 declined, and 45 remained unchanged.
The turnover, a key indicator of market activity, increased by 13% to Tk573 crore.
On the sectoral front, bank stocks recorded the highest turnover, accounting for 26.7% of the Dhaka Stock Exchange's total turnover. The banking sector also offered the highest return of the day, with an average gain of 3.9%.
Among the 36 listed banks, nearly all saw sharp price increases, with only one exception. Notably, five out of the day's top ten gainers came from the banking sector, led by Rupali Bank. Other top-performing banks included AB Bank, Exim Bank, Midland Bank, and First Security Islami Bank.
EBL Securities said in its daily market commentary, "The benchmark index of the capital bourse experienced a bullish momentum today, extending its gaining streak for three consecutive sessions, as investor sentiment remained upbeat, particularly toward banking sector scrips amid renewed sector specific optimism following recent reform initiatives undertaken by the central bank."
Buyers' dominance persisted throughout the session, with buying interest also witnessed in certain large-cap scrips trading at attractive valuations, enabling the bulls to retain the helm of the market momentum and driving the benchmark index to surpass a two-month high, it added.
Saiful Islam, president of the DSE Brokers Association, told The Business Standard, "We've been saying for a long time that the market would rebound. I believe this is that rebound."
He further said, "Investors are now much more confident than before. Especially, the uncertainty surrounding the national election has largely eased. Moreover, the country's economy is stabilising, which has helped restore investor confidence."
Regarding the rise in the banking sector, he said, "The banking sector is going through a reform process. And any reform comes with some pain."
Emran Hasan, Managing Director of Investit Asset Management, said, " The market experienced its sharpest two-month correction in five years during April and May, falling by slightly more than 11%. This significant drop pushed valuations down, prompting many investors to buy in at attractive price points, fueling the current rebound."
Salim Afzal Shawon, Head of Research at BRAC EPL Stock Brokerage, said, "As more clarification comes up from the regulator regarding merger of Islamic banks and reform in the sector, the added clarity improved investor comfort and created expectations, notably in banking stocks."
"Overall, as directions are becoming visible for a number of major uncertainties, investors are getting stronger convictions to consider investing in the market," he added.
