The stock market snapped a three-week winning streak last week as investors locked in profits and turned cautious over proposed margin lending reforms and renewed geopolitical tensions in the Middle East.
The benchmark DSEX index fell 96.06 points, or 1.63 per cent, to close at 5,804.30, while average daily turnover dropped 27.91 per cent to Tk1,063.27 crore from Tk1,474.85 crore a week earlier, according to Sheltech Brokerage.
Market capitalisation declined 1.35 per cent, or Tk9,613 crore, to Tk7.01 lakh crore, while losers outnumbered gainers by nearly two to one, reflecting broad-based selling across sectors.
Sheltech Brokerage in its weekly market recap report said investors rushed to book profits after a strong rally, while uncertainty surrounding proposed changes to margin lending rules and escalating tensions in the Middle East weakened risk appetite.
Selling pressure emerged early in the week, particularly in insurance stocks, amid concerns that proposed margin lending amendments could tighten financing eligibility for the sector.
The market attempted a midweek rebound on expectations that the proposed rules could be revised and optimism ahead of earnings announcements by December-closing companies. However, the recovery faded as selling resumed toward the end of the week.
Analysts said buying interest shifted to mutual funds and financial institutions after regulators allowed mutual funds to retain unrealised gains instead of distributing them as cash dividends, while improving earnings expectations also supported financial stocks.
Insurance stocks posted the steepest weekly decline, falling 6.66 per cent, followed by travel and leisure, down 6.16 per cent, and jute, down 5.34 per cent.
Only three sectors ended the week higher. Mutual funds gained 9.30 per cent, financial institutions rose 2.60 per cent and textiles advanced 1.42 per cent.
Trading remained concentrated in textile shares, which accounted for 17.65 per cent of turnover, followed by pharmaceuticals and chemicals’ 13.48 per cent and insurance sector’s 10.87 per cent turnover contribution.
Among major index constituents, Square Pharmaceuticals, Walton Hi-Tech, Beximco Pharmaceuticals and BRAC Bank exerted the largest downward pressure on the benchmark index, while IDLC Finance, United Commercial Bank and Sharp Industries provided the strongest support.
Sheltech Brokerage said investors are likely to monitor the outcome of the proposed margin lending reforms, corporate earnings announcements and developments in the Middle East before taking fresh positions.
