The country’s capital market experienced another sharp decline yesterday as political instability and economic concerns continued to weigh heavily on investor sentiment. The benchmark index DSEX dropped by 38.7 points, closing at 4,746, marking a new low in recent months as market volatility persists.
This decline continues a broader downtrend that has unsettled both retail and institutional investors. Caution dominated the trading floor, with the majority of listed securities seeing further price erosion.
Market Overview: Sentiment Remains Bearish
Despite a slight uptick in market turnover, the overall trend remained negative. The Dhaka Stock Exchange (DSE) reported a 10% increase in turnover, which rose to Tk278 crore, rebounding slightly after hitting a ten-month low last Thursday. However, this rise in turnover did not reflect improved investor confidence.
Among 397 securities traded on the DSE:
- 271 saw price declines
- 74 experienced gains
- 52 remained unchanged
Market breadth remained largely negative throughout the trading day, and the brief positive movement seen during early sessions failed to gain momentum.
Index Performance: All Major Indicators in the Red
All three major indices closed in the red:
- The DSES (Shariah-compliant index) fell by 9.66 points, ending at 1,037
- The DS30, comprising blue-chip stocks, declined by 23.80 points to settle at 1,753
The downward pressure across all indices highlighted the extent of investor uncertainty, particularly surrounding macroeconomic indicators and political developments.
Investor Behavior: On the Sidelines Amid Lingering Concerns
Market participants largely chose to remain on the sidelines, preferring caution over risk-taking. Despite a momentary uptick during the early trading session, the broader mood remained subdued.
Persistent uncertainty surrounding inflation, foreign exchange reserves, and political tensions appear to have undermined investor appetite. The lack of positive triggers has created an environment where traders and long-term investors alike are hesitant to re-enter the market in any meaningful capacity.
Sectoral Breakdown: Banks, Food, and Textiles Lead Turnover
From a sectoral perspective, a few sectors led the activity in terms of turnover:
- Banking sector topped the list with 26.2% of the day’s total turnover
- Food sector followed with 10.0%
- Textile sector came third, contributing 9.7%
Despite leading in turnover, the banking sector saw significant declines due to post-dividend adjustments, pulling down the broader index performance.
Top Gainers: Limited Positivity in Select Stocks
Some individual scrips defied the broader market trend and posted notable gains:
- Atlas Bangladesh rose by 9.98%, closing at Tk57.3
- Shinepukur Ceramics advanced 9.90% to Tk23.3
- S Alam Cold Rolled Steels gained 9.74%, ending at Tk21.4
These stocks stood out as rare bright spots in an otherwise bearish market, reflecting selective investor interest.
Dividend Adjustments Trigger Sharp Bank Stock Losses
Four major banks were among the top losers as their stock prices adjusted following the declaration of stock dividends for 2024. These adjustments led to sharp drops:
- City Bank declined by 16.66% to Tk19
- Pubali Bank fell by 14.73% to Tk24.3
- Mutual Trust Bank (MTB) dropped by 12.71% to Tk10.3
- Dutch-Bangla Bank decreased by 10.56% to Tk38.1
These movements were expected as part of technical adjustments post-dividend, though the scale of the decline affected broader market sentiment, particularly in the banking segment.
Chittagong Stock Exchange (CSE) Also Suffers Losses
The bearish mood was not limited to the Dhaka bourse. The Chittagong Stock Exchange (CSE) also closed in negative territory:
- CSCX (Selective Categories’ Index) dropped by 54.1 points
- CASPI (All Share Price Index) fell by 91.5 points
Both indices reflected a broad-based decline across the port city’s bourse, underscoring that the downturn is systemic and not isolated to a specific market segment.
Looking Ahead: Market Needs Clear Signals to Stabilize
Market analysts note that unless there is a significant change in the economic or political landscape, it is unlikely that investor confidence will rebound in the near term.
Key factors influencing sentiment include:
- Political clarity and stability ahead of upcoming fiscal decisions
- Inflation control and monetary policy signaling from the central bank
- Clarity on foreign exchange reserve strategies and currency policy
Until such signals emerge, the likelihood of sustained recovery remains low.
Conclusion: A Market Gripped by Uncertainty
The current state of the capital market highlights a clear lack of direction and trust. With key economic and political challenges unresolved, the DSEX continues to find new lows, dragging investor morale with it.
While selective gains in a handful of scrips indicate that there is still room for growth in niche areas, the broader market needs strong structural support—both economic and regulatory—to regain its footing.
For now, the dominant theme remains one of caution. Investors are watching and waiting for signs of change. Until then, the market may continue to hover in a downward trajectory, influenced by both internal uncertainties and external pressures.
