Stocks rebound after two-day slump 

The benchmark DSEX index of the Dhaka Stock Exchange (DSE) regained momentum following a sharp two-day decline, buoyed by renewed investor interest in blue-chip stocks during the final hour of trading yesterday.

The DSEX rose by 19 points to close at 4,795. Meanwhile, the DSE Shariah Index (DSES) edged down by 5 points to 1,047, and the blue-chip index DS30 gained 8 points to settle at 1,780. 

Turnover increased slightly to Tk298 crore, up from Tk289 crore in the previous session.

Market insiders described the session as a brief pause in an otherwise persistent downtrend, amid an ongoing confidence crisis. They noted that although the government wants to see a healthy stock market, the current commission is failing to make the right decisions to revive it. 

The main reason, they argue, is that the current BSEC chairman, despite being a seasoned banker, lacks the specialised expertise needed to navigate the complexities of the capital market. As a result, investor confidence remains fragile, and key challenges have gone unaddressed.

On the other hand, investors with a clean image have largely exited the market. The remaining participants are mostly those involved in day trading and, in some cases, market manipulation. 

Recently, the regulator has taken action against manipulators, further reducing market activity. 

The secondary market has also become almost as dry as the primary market. 

In the absence of confidence and liquidity, even blue-chip stocks are being sold off by investors seeking safer options, which is having an even more negative impact on the capital market.

Following the political transition in August last year, many investors had anticipated a market revival. However, nearly a year on, those expectations remain unmet, with bearish sentiment prevailing and frustration mounting among retail participants.

Moreover, analysts point to several underlying factors behind the ongoing downturn. A recent surge in gas prices is expected to increase production costs across industries, intensifying concerns about corporate earnings. Institutional participation remains low, while retail investors continue to exit the market, further weakening overall market sentiment.

EBL Securities, in its weekly market commentary, noted that the prime index of the Dhaka bourse logged a slight recovery, primarily riding on some last-hour buying activity, in particular large-cap scrips, although overall investment appetite still remained subdued amid lingering pessimism that kept most participants on the sidelines. 

The market opened with a brief spell of buyer dominance, but the momentum soon faded as jittery investors continued to seize every opportunity to liquidate their holdings in the ailing market. 

Nonetheless, late-session buying activities helped the market regain some ground, though uncertainties still persist considering the prolonged market downturn amid prevailing economic and political challenges, according to the market commentary.

On the sectoral front, the pharmaceuticals sector led in turnover, contributing 25.5%, followed by banking at 18% and mutual funds at 10.8%.

Overall, sectoral performance was mixed. Among the gainers, the travel sector posted the highest return at 0.8%, followed by banking and non-bank financial institutions, each rising by 0.6%. 

On the other hand, the mutual funds sector saw the highest correction, dropping by 0.4%, followed by food 0.3% and tannery 0.1%.

Meanwhile, the port city bourse, Chittagong Stock Exchange (CSE), ended in the red. The Selective Categories Index (CSCX) declined by 6.9 points, and the All Share Price Index (CASPI) dropped by 8.0 points.