DSEX Falls Below 5,500 as Earnings Caution and Fuel Costs Weigh on Investors
The benchmark index lost 56 points during the week, while lower turnover and broad-based declines reflected weak market confidence.
The Dhaka Stock Exchange's benchmark index finished the week below the 5,500 mark, underscoring a cautious mood among investors who remain reluctant to take aggressive positions while corporate results are still coming in and broader economic pressures persist.
The DSEX closed at 5,475, down 56 points or 1.01 percent over the five trading sessions. The decline marked the second consecutive weekly loss and brought the cumulative drop over the past two weeks to 102 points. Trading was uneven: the index fell in the first three sessions as selling pressure dominated, then recovered modestly in the final two days when some bargain hunters stepped in to pick up stocks that had already corrected. The late rebound, however, was too limited to erase the earlier losses.
Several factors weighed on sentiment. Market participants cited ongoing uncertainty about earnings from companies that close their books in June, as well as the recent increase in administered fuel prices. Higher fuel costs are expected to raise transport, production and distribution expenses across a wide range of industries, which could squeeze profit margins in coming quarters. At the same time, Bangladesh Bank's decision to keep its policy rate unchanged at 9.5 percent reinforced the view that borrowing costs will stay elevated for the foreseeable future. Elevated financing costs make it harder for companies to expand and can push risk-averse investors toward fixed-income instruments rather than equities.
Trading activity also slowed. Average daily turnover on the DSE fell more than 21 percent to Tk 5.56 billion, even though total weekly turnover rose slightly to Tk 37.82 billion from Tk 35.30 billion the previous week. The textile sector accounted for the largest share of trading value at 29.5 percent, followed by general insurance at 10.9 percent and pharmaceuticals at 10.5 percent. Saiham Textile was the most actively traded stock, with Paramount Textile, Evince Textile, BRAC Bank and IPDC Finance also ranking high in turnover.
Market breadth was clearly negative. Declining issues outnumbered advancing ones by a wide margin—290 stocks fell while only 81 rose and 14 remained unchanged. Most major sectors closed lower. Mutual funds recorded the steepest drop after recent gains, while pharmaceuticals, non-bank financial institutions, engineering and banking also ended in the red. Selective large-cap names, including Islami Bank, United Commercial Bank, Beximco Pharma, Walton Hi-Tech Industries and Square Pharma, together contributed more than 19 points to the weekly decline in the DSEX.
The blue-chip DS30 index, by contrast, managed a small gain of two points to close at 2,105. The Shariah-based DSES index lost 13 points to finish at 1,087. The Chittagong Stock Exchange mirrored the weaker tone, with its All Share Price Index (CASPI) shedding 171 points to 14,660 and the Selective Categories Index (CSCX) losing 83 points to 9,017.
Overall, the week illustrated a market still searching for clear positive catalysts. Brokers noted that many investors are reassessing portfolios and shifting toward names with relatively stronger fundamentals or those that have already undergone significant price corrections, rather than initiating fresh positions. Until clearer signals emerge on corporate earnings and the path of domestic economic conditions—including energy costs and financing rates—the near-term outlook for a sustained recovery remains clouded.