Stocks extend losses as investors turn cautious

The benchmark equity index extended its losing streak for a third consecutive week, as investors mostly stayed on the sidelines amid a lack of clear catalysts while upcoming earnings season kept the market sentiment cautious.

Analysts noted that market sentiment remained subdued, with institutional and high-net-worth investors showing reluctance to inject fresh funds into equities amid mixed earnings expectations for June-closing companies.

General investors largely preferred holding cash over making new investments, while some opted to reshuffle their portfolios ahead of earnings declarations, they said.

This week, the market saw the first two sessions close lower while three others pared some losses as investors turned cautious amid volatility.

The DSEX, the benchmark index of Dhaka Stock Exchange (DSE), finally settled the week more than 34 points or 0.64 per cent lower at 5,415. The DSEX lost a total of 198 points in the past three consecutive weeks.

The blue-chip DS30 index, a group of 30 prominent companies, also lost 4 points to close at 2,103 while the DSES index, which represents Shariah-based companies, shed 7 points to end at 1,171.

EBL Securities, in its weekly analysis, said the capital bourse endured another challenging week as broad-based selloffs in absence of a reviving catalyst for the ailing market pushed the market indices to decline further.

Although bargain hunters returned to the market, targeting a handful of stocks trading at lucrative price levels after the recent downturn, the weakening strength of the market momentum kept equity indices anchored in negative territory, it noted.

Sector-specific stocks, including Islami Bank Bangladesh, National Bank Ltd, Square Pharmaceuticals, Social Islami Bank, and Walton Hi-Tech Industries, dragged the market down during the week.

Together, these five stocks accounted for an 18.7-point decline in the DSE's core index, according to the EBL Securities' analysis.

However, shares of some underperforming companies also continued to surge, raising concern over potential market manipulation.

Three junk stocks -- Genex Infosys Limited, Dulamia Cotton Spinning Mills, and Miracle Industries -- featured in the week's top 10 gainers' list, soaring between 11 per cent and 17.6 per cent during the week.

As investors' participation remained thin, the total turnover came down to Tk 29.18 billion as against Tk 35.05 billion in the week before.

Accordingly, the average daily turnover dropped to Tk 5.8 billion, down 16.7 per cent from the previous week's average turnover of Tk 7 billion.

Textile sector dominated the turnover list, capturing 15.8 per cent of the week's total turnover, followed by pharmaceuticals (14.2 per cent) and banking sector (9.9 per cent).

Most of the major sectors posted negative returns. The banking sector witnessed the highest loss of 1.9 per cent, followed by food (1.4 per cent), telecommunication (0.9 per cent), power (0.7 percent), Pharma (0.4 per cent) and textile (0.4 per cent).

Losers dominated the DSE floor this week, as out of 395 issues traded, 219 saw price fall while 139 others gained and 37 issues remained flat.

Summit Port Alliance topped the weekly turnover list, closely followed by Khan Brothers PP Woven Bag Industries, Orion Infusion, Far East Knitting & Dyeing Industries Limited, and Techno Drugs.

GQ Ball Pen Industries was the week's top gainer, rising 17.80 per cent while Baraka Power Limited the worst loser, shedding 20.7 per cent.

The Chittagong Stock Exchange also ended lower, with its All Shares Price Index (CASPI) shedding 250 points to close at 15,088, while the Selective Categories Index (CSCX) fell 142 points to 9,277.

The port city bourse traded 12.90 million shares and mutual fund units with turnover value of Tk 800 million.

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