Stocks extend losses for fifth week as economic uncertainty lingers

The stock market continues its downward trend for the fifth week in a row, driven largely by escalating geopolitical tensions in the subcontinent, which weighed heavily on investor confidence.

On Wednesday -- the day India launched airstrikes on Pakistan, the benchmark equity index tanked 149 points or 3 per cent to close at 4802, the lowest in four years and nine months. However, the index bounced back strongly the next day, gaining nearly 100 points as investors saw it an opportunity to snap up beaten-down stocks at lucrative prices.

This week began on a positive note, supported by bargain hunting in select stocks that posted strong quarterly earnings and were trading at attractive valuations.

The first two days saw the index ending in the green, but stocks nosedived in the next two days due to geopolitical tensions. However, the last day of the week eroded much of the losses.

DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), finally settled the week 15.64 points or 0.32 per cent lower at 4,902. The prime index lost a total of 304 points in the past five straight weeks.

Market analysts say the extended downturn has driven investors to retreat from equities, with many opting to avoid fresh positions. Portfolio losses have continued to deepen as the market struggles without a clear catalyst to restore investor confidence.

Two other indices also closed lower. The DS30 index, a group of 30 prominent companies, shed 2.43 points to settle at 1,820, while the DSES Index, which represents Shariah-based companies, fell 19.9 points to close at 1,074.

The total turnover on the prime bourse stood at Tk 24.15 billion this week, up from Tk 14.10 billion the previous week, as this week saw five trading days as against four trading days in the previous week.

Consequently, the average daily turnover increased to Tk 4.83 billion, 37 per cent up from the previous week's figure of Tk 3.52 billion.

EBL Securities, in an analysis, said that despite the steep decline on Wednesday, the market posted a modest recovery during the final trading session, buoyed by expectations surrounding an upcoming meeting between the Chief Adviser and capital market stakeholders to address the ongoing crisis.

Still, many cautious investors chose to stay on the sidelines, as the market continues to lack a clear catalyst for a sustained rebound, it added.

Investors were mostly active in the banking sector, which accounted for 22 per cent of the week's total turnover, followed by the food sector (12.7 per cent) and power sector (9.9 per cent).

Sectoral performance was mixed, with mutual funds posting the highest gains (8.7 per cent), while the paper sector suffered the sharpest decline, shedding 5.8 per cent.

Most of the traded stocks saw fall in their prices. Of 394 issues traded, 230 declined while 141 issues gained and 23 others remained unchanged on the DSE trading floor.

Baraka Patenga Power Limited was the week's top gainer, rising 57.80 per cent while Khulna Power Company Limited was the worst loser, shedding 14.0 per cent.

The Chittagong Stock Exchange (CSE) also ended lower with the CSE All Share Price Index (CASPI) losing 101.44 points to settle at 13,704 and the Selective Categories Index (CSCX) shedding 62 points to close at 8,367.

The port city's bourse traded 20.31 million shares and mutual fund units with turnover of Tk 215.21 million.

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