Stocks surge as banks, insurers lead market rally
Analysts described the turnover figure as resilient given the depth of participation and strong demand in major sectors
Dhaka stocks extended their upward momentum yesterday, fueled by strong rallies in bank and insurance shares, as investors regained confidence following recent corrections.
The broad index of the Dhaka Stock Exchange (DSEX) surged by 66.2 points, or 1.22%, to close at 5,455, compared to 5,389 points in the previous session.
Market insiders said the buying spree was largely driven by renewed investor appetite for bank and insurance stocks, which had faced pressure in earlier weeks. General insurance, life insurance, and bank sectors topped the day's gainers with returns of 4.3%, 2.7%, and 1.9%, respectively, boosting overall sentiment in the market.
The rally in these heavyweight sectors also lifted the blue-chip index, DS30, which gained 27 points or 1.29% to settle at 2,128. Meanwhile, the Shariah-compliant DSES advanced by nearly 10 points, or 0.84%, to close at 1,189. Market breadth also tilted towards the bulls, as 238 issues advanced against 114 that declined, while 44 remained unchanged.
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Despite the upbeat mood, turnover – the key indicator of market participation – declined marginally by 1.9% to Tk1,178 crore compared to Tk1,200 crore in the previous session.
Analysts, however, described the turnover figure as resilient given the depth of participation and strong demand in major sectors.
Over the last two sessions, the market capitalisation of the bourse has risen by Tk4,500 crore, reflecting renewed optimism.
EBL Securities, in its daily market commentary, noted that the capital market extended its bullish momentum on the back of broader buying appetite across sectors, particularly in banks.
"Investors turned back to heavyweight bank stocks following recent corrections, further strengthening the market's upward trajectory," the brokerage said.
It added that buyers continued to dominate the trading board throughout the session, drawing stronger participation and sustaining investor confidence.
Pharmaceuticals once again retained the top spot in terms of turnover contribution, accounting for 16% of the day's trade, followed by Textile with 12.3% and General Insurance with 11.8%.
Among individual stocks, City Bank, Beacon Pharmaceuticals, Bangladesh Shipping Corporation, Malek Spinning, and Sonali Paper emerged as the day's top turnover leaders.
Index-pulling heavyweights such as BRAC Bank, Islami Bank, Square Pharmaceuticals, Orion Pharma, and Beacon Pharma were among the biggest contributors to yesterday's surge.
Orion Pharma, which gained 9.93%, also featured among the top gainers alongside Republic Insurance, Central Insurance, Beacon Pharma, and Continental Insurance, all of which registered gains of more than 9%.
However, not all sectors shared in the rally. Jute and IT suffered mild corrections, shedding 1.2% and 0.3%, respectively.
On the losers' list, non-bank financial institutions dominated, with BIFC dropping 10%, FAS Finance losing 9.09%, Premier Leasing falling 8.69%, Prime Finance declining 8.57%, and International Leasing shedding 8.33%.
In the port city, the Chittagong Stock Exchange (CSE) also mirrored the upbeat trend. The CSCX index rose by 111 points, or 1.20%, to 9,362, while the CASPI advanced by 170 points, or 1.13%, to close at 15,227. Turnover at the CSE saw a significant jump of 147%, reaching Tk50.45 crore.
Market analysts said the rise in both banks and insurers reflected investors' growing confidence in the stability of these sectors, which are often considered market drivers.
"The shift in buying interest suggests that investors are anticipating a turnaround in the financial sector, and this is encouraging broader participation across the bourse," said a senior market analyst at a top brokerage firm.
