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The benchmark equity index of the Dhaka Stock Exchange (DSE) crossed the 5,000-mark threshold after three weeks on Monday, largely supported by the Investment Corporation of Bangladesh (ICB).
The state-run investment bank began injecting funds into the market this week after receiving Tk 10 billion from the government.
ICB received the fund as a government loan at a 5 per cent interest rate for a 10-year tenure, with a one-year grace period, to help ease its liquidity crisis and stabilise the stock market.
"We have started injecting the fund into the market, particularly into fundamentally strong stocks, from the amount received from the government," said Prof Abu Ahmed, chairman of ICB.
The investment bank formally inaugurated the investment programme after opening a separate beneficiary owner account on Monday.
The ICB chairman said the institution can invest only in 'A' category stocks with dividend yields above 5 per cent, as per current investment conditions.
The market also reacted psychologically as news of ICB's market-supportive measures spread across the trading floor during the session.
Analysts said that, alongside ICB's support, bargain hunters showed renewed interest in beaten-down stocks in hopes of securing short-term gains, despite ongoing political concerns.
"General investors, including institutional ones, rushed to put fresh funds into blue-chip stocks as they came down to attractive valuations after a recent correction," said Akramul Alam, head of research at Royal Capital.
Speculation about a favourable outcome in the ongoing legal proceedings concerning the newly enacted margin rules also appeared to provide support to the market, he added.
Subsequently, all 30 blue-chip stocks saw significant price appreciation as investors were encouraged to park funds amid growing confidence. "It's a good sign that well-performing stocks are getting investors' attention," Mr Alam said.
Market indices maintained an upward trajectory throughout the session, supported by broad-based price appreciation. The benchmark DSEX surged 109 points, or 2.22 per cent, to 5,025.
The index recovered 156 points over the past two sessions after shedding 409 points over the previous three straight weeks.
The blue-chip DS30 index, comprising 30 prominent companies, jumped 43 points to 1,926, while the DSES index, representing Shariah-based companies, gained 25 points to 1,053.
Opportunistic investors returned to the market amid the recent recovery streak, defying uncertainties surrounding market momentum, said EBL Securities. These investors took advantage of oversold stocks that had seen steep corrections in recent weeks, the stockbroker added.
Price gains in major blue-chip stocks-such as Beximco Pharma, Islami Bank, BRAC Bank, BAT Bangladesh, Beacon Pharma, Walton, Eastern Bank and Renata-contributed significantly to the index surge. These stocks accounted for 27 points of the DSEX rise.
Market liquidity also strengthened, with total turnover crossing the Tk 6 billion mark after six weeks. Turnover stood at Tk 6.36 billion, up 65 per cent from the previous day.
Investors were most active in the textile sector, which accounted for 17 per cent of the day's total turnover, followed by engineering and pharmaceuticals.
Gainers vastly outnumbered losers: of 391 issues traded, 359 advanced, 22 declined and 10 remained unchanged on the DSE floor.
All major sectors closed higher. Non-bank financial institutions posted the highest gain of 4.10 per cent, followed by engineering, food, banking, pharmaceuticals and power.
Simtex Industries became the most-traded stock, with shares worth Tk 202 million changing hands, followed by Orion Infusion, Summit Alliance Port, Anwar Galvanizing and Runner Automobiles.
The Chittagong Stock Exchange also closed sharply higher, with its All Shares Price Index (CASPI) rising 234 points to 13,911, and the Selective Categories Index (CSCX) advancing 132 points to 8,564.
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