The benchmark index of the prime bourse on Sunday posted the biggest single-day gain in the past 13 months amid growing optimism about the market's recovery after its continuous fall.
DSEX, the prime index of the Dhaka Stock Exchange (DSE), climbed 108 points or 2.05 per cent to settle at 5,394 on Sunday.
The rise of the index marked the highest single-day gain since April 01, 2018, when DSEX jumped more than 150 points or 2.67 per cent.
Market analysts said the buying spree was mainly driven by the government's market-supportive measures aimed at making the capital market vibrant.
Extending the previous day's gaining streak, the market opened on a positive note and remained vibrant throughout the session amid strong buying pressure from the investors.
The past three months saw the DSEX erode 775 points or 13 per cent, prompting aggrieved investors to take to the streets and resort to a token hunger strike.
When the market situation spiralled out of control, the government high-ups, including Prime Minister Sheikh Hasina, stepped in to resolve the crisis by holding meetings with the market regulator and the finance minister last week.
The securities regulator's market-supportive measures, Prime Minister's assurance and the reintroduction of the capital market refinancing fund finally cheered the stocks, said a leading broker.
The market regulator took a number of measures, including the one that no new applications from non-listed companies would be accepted for the purpose of raising capital, which would reduce the number of 'placement shareholders'.
The government has also extended the tenure of the capital market refinancing scheme worth Tk 8.56 billion up to December 31, 2022, making some amendments to it.
AB Mirza Azizul Islam, former finance adviser to the caretaker government, told the FE that the government's measures, including the extension of the timeframe of the capital market refinancing fund, sent a positive signal to the stock investors.
Mr Islam, also a former chairman of the Bangladesh Securities and Exchange Commission, however, said it is a short-term solution.
For sustainable development of the capital market, investors' mindset and behaviour do need a change, he said without elaborating.
He also suggested bringing quality stocks to the capital market to attract investors as well as increasing the depth of the market.
Turnover, another important indicator of the market, also exceeded the Tk 5.0 billion-mark after nearly two months and amounted to Tk 5.35 billion, up 12.6 per cent from the previous day's turnover of Tk 4.75 billion.
The gainers outpaced losers, as out of 345 issues traded, 292 advanced, 38 declined and 15 issues remained unchanged on the DSE trading floor.
"Spontaneous participation backed by hope and excitement following the government's latest initiatives lured the investors to take position on the large-cap stocks," said a merchant banker.
He noted that investors became active on the market for taking fresh position in sector-specific stocks, considering favourable price level.
The market rally has been supported by large-cap sectors like food, non-bank financial institutions, engineering, banking and power, which gained more than 2.0 per cent each.
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