DSE extends recovery for second week as investors take cautious positions

The Dhaka Stock Exchange (DSE) extended its recovery for the second consecutive week, as investors cautiously engaged on both the buy and sell sides, anticipating improved conditions in an oversold and volatile market.

By week's close, the benchmark DSEX rose 159 points to settle at 4,028. The blue-chip DS30 gained 56 points to 1,934, while the Shariah-compliant DSES advanced 39 points to 1,057. The DSE SME Index (DSMEX) also added 24 points, closing at 916.

Market insiders noted that despite recent gains, many investors were unable to book significant profits, as short-term volatility and uncertainty ahead of the national election schedule kept sentiment cautious. Z-category stocks dominated trading this week, reflecting selective participation amid political and market uncertainty.

"The market has been heavily oversold after several weeks of consecutive declines," a trader said. "Many fundamentally strong stocks are now trading at attractive levels, prompting opportunistic investors to take fresh positions in anticipation of a rebound."

Analysts also attributed part of the previous decline to the enforcement of new margin loan rules, which triggered forced sell-offs and added downward pressure on prices.

Trading activity picked up significantly, with average daily turnover rising 32.09% to Tk525 crore from Tk398 crore the previous week. Total weekly turnover reached Tk2,626 crore, up from Tk1,988 crore, while market capitalisation climbed 1.52% to Tk6,92,133.38 crore. Out of 414 issues traded, 335 advanced, 32 declined, 12 remained unchanged, and 34 saw no trading activity.

According to EBL Securities, the market's recovery was supported by media reports of central bank funding for ICB, alongside growing expectations of an imminent tentative election schedule, which boosted investor confidence.

Sector-wise, investors were most active in Engineering (13.3%), followed by Fuel & Power (12.5%) and Textiles (12.0%). All sectors closed in positive territory, with IT leading at 9.1%, followed by General Insurance at 7.6% and Paper at 7.4%.

While profit-taking by risk-averse investors slowed momentum late in the week, buyers maintained dominance, extending the market's short-term recovery streak.