Stocks slump as selling pressure mounts ahead of dividend season

Stocks on the Dhaka Stock Exchange (DSE) plunged today (5 October) as risk-averse investors dumped holdings across the board, extending the broad market's losing streak to a third consecutive session amid macroeconomic concerns and caution ahead of dividend declarations.

The benchmark DSEX index fell 37 points to settle at 5,445, its lowest level of the day. The blue-chip DS30 index, comprising financially sound companies, also dropped 3 points to close at 2,081. Daily turnover on the exchange declined slightly to Tk537 crore.

Market participants attributed the persistent weakness to anxiety surrounding the upcoming earnings and dividend announcements of June-ending listed firms, alongside broader macroeconomic uncertainties that kept investors firmly on the defensive.

In its daily market review, EBL Securities said the ailing capital market witnessed another session of heavy selling pressure as investors remained cautious ahead of the corporate earnings season. Persistent domestic challenges kept investors defensive, limiting prospects for a sustainable near-term recovery.

The review added that the broad index remained on a downward trajectory from the opening bell as broad-based selling swept across the trading floor, underscoring pervasive risk aversion.

Brokerage firm Sheltech Brokerage Limited noted that market performance was weighed down by sustained selling pressure and cautious sentiment over the June-ending companies' fiscal-year disclosures, alongside concerns about a recessionary macroeconomic outlook. Heavy selling persisted throughout the session, dragging the benchmark index to its intraday low of 5,445 points, where it closed.

Market breadth remained heavily skewed towards decliners, with 284 issues falling, while 54 advanced and 48 remained unchanged on the DSE floor.

The downward movement was heavily driven by major large-cap stocks, with Islami Bank, Beximco Pharma, United Commercial Bank, Malek Spinning, and One Bank emerging as the primary index draggers for the session.

On the sectoral front, trading activity was heavily concentrated in the textile sector, which accounted for 29.5% of total daily turnover. The pharmaceuticals sector followed with a 13.1% contribution, while general insurance held 10.5%. 

Most sectors posted negative returns for the day, with the ceramic sector suffering the steepest correction at 3.4%, followed by IT at 2.8% and general insurance at 2.2%.

Among individual equities, Paramount Textile, Saiham Textile, Apex Foods, Acme Pesticides, and IPDC Finance dominated the turnover table as the day's top-traded stocks.

Apex Foods led the gainers' chart with a sharp rally of 19.57%, followed by Shyampur Sugar, which jumped 8.63%, and Zeal Bangla Sugar, which gained 7.86%. ICB Sonali Bank 1st Mutual Fund rose 6.57%, while Intraco Refueling Station advanced 5.88%.

Conversely, Techno Drugs emerged as the worst performer of the session, plunging 9.82%, closely followed by Zahintex Industries, which shed 6.32%. Fareast Knitting fell 5.60%, BD Thai Food declined 5.31%, and Aman Feed dropped 5.29%.

The Chittagong Stock Exchange (CSE) also ended lower in tandem with the capital's bourse. The CSCX index surrendered 32 points to close at 8,971, while the All Share Price Index (CASPI) dropped 40 points to settle at 14,620.