Bargain hunting fuels 39-point DSEX recovery as reform hopes spark liquidity

The country's premier bourse returned to positive territory today (1 September), providing a much-needed respite to the capital market after a prolonged downturn. 

Driven by aggressive bargain hunting and renewed optimism over structural reforms, the benchmark DSEX index of the Dhaka Stock Exchange (DSE) surged by 39 points, or 0.70%, to settle at 5,637.

Market participation saw a healthy spike as total turnover on the DSE jumped by 25% to reach Tk596 crore, compared to the previous session. The day's trading was characterised by overwhelming bullish dominance, with the market breadth showing 300 issues advancing, 50 declining, and 38 remaining unchanged.

According to EBL Securities' daily market review, the ailing capital market got some relief as investors viewed prevailing prices as attractive entry points. Bargain hunters stepped in to accumulate beaten-down stocks, particularly in sectors that had undergone sharp corrections.

The market opened on an optimistic note, supported by favourable remarks from regulators on the capital market's long-term development. Although selling pressure emerged intermittently after mid-session, it was not enough to wipe out the morning gains, with buyers remaining in control until the close, it added. 

Sheltech Brokerage Limited observed that the rally was driven mainly by renewed buying interest and optimism over the Bangladesh Securities and Exchange Commission's (BSEC) recent market-development initiatives. The benchmark index climbed to an intraday high of 5,674.16 points, but late-session profit-taking erased much of the gain. 

The index eventually closed near its intraday low of 5,624 points as some investors opted to book quick profits amid persistent domestic challenges, it also said. 

On the sectoral front, the textile sector dominated the floor, accounting for 27.9% of the total turnover, followed by the banking and pharmaceutical sectors at 12.2% and 12.0%, respectively. 

Nearly all sectors posted gains, led by mutual funds, which rose 4.2%, followed by general insurance at 2.2% and information technology at 2.0%. Cement was the only laggard, declining marginally by 0.4%.

Among individual stocks, First Finance was the top gainer, rising 8.88%, followed by First Janata Bank Mutual Fund and PHP First Mutual Fund, both up 8.82%.

On the flip side, Jute Spinners was the top loser, falling 3.61%, followed by Meghna Condensed Milk and Nurani Dyeing. IPDC Finance, Saiham Textile and Saiham Cotton were among the most actively traded stocks.

The bullish sentiment was stronger at the Chittagong Stock Exchange (CSE), where the Selective Categories' Index (CSCX) gained 37 points to 9,237, while the All Share Price Index (CASPI) rose 60 points to 15,130. Trading activity surged 207%, with turnover reaching Tk51 crore.