Stock market rebounds as banks drive early-year optimism

Gazi Anowar:

The country’s stock market began the new year on a positive note, rebounding from last week’s slump as heavyweight banking stocks showed resilience and boosted investor sentiment.

After a challenging four years, opportunistic investors seized on oversold shares—especially in the banking sector—that had undergone significant corrections in 2024. Analysts attributed the recovery largely to strong operating profit growth posted by major banks for last year, driven by substantial income from investments in government securities.

The Dhaka Stock Exchange’s benchmark DSEX index closed the first trading week of 2025 at 5,200 points, gaining 15 points or 0.29 percent, after shedding 37 points in the previous week. The blue-chip DS30 index rose 4 points to 1,931, while the Shariah-compliant DSES index fell 12 points to 1,155.

Investor activity picked up notably, with average daily turnover rising 18.6 percent to Tk 348.1 crore from Tk 293.5 crore a week earlier. The banking sector accounted for the largest share of turnover at 17.3 percent, followed by pharmaceuticals at 16.9 percent and engineering at 8.8 percent.

Sector-wise, banking stocks emerged as the biggest winners, rising 3.4 percent during the week, while the jute sector posted the steepest decline at 4.9 percent.

The Chittagong Stock Exchange (CSE) mirrored the uptrend, with its CASPI index gaining 117 points to close at 14,552, and the CSCX index rising 66 points to 8,859. The port city bourse traded 1.31 crore shares and mutual fund units, generating Tk 167 crore in turnover.

“While the banking sector’s performance is a positive signal, the broader market still lacks a major catalyst to inspire sustained momentum,” said financial analyst Abdur Rahman, a former DSE director. “Investor caution is understandable, given the lingering pessimism and uncertainties. For a durable rally, we need broader participation across sectors and clear policy signals from regulators.”

Despite the cautious tone, market observers say the early-year rebound may set the stage for a more stable trading environment—provided upcoming corporate earnings and fiscal measures align with investor expectations.