The benchmark index of the Dhaka Stock Exchange (DSE) slipped into the red this week, ending a five-week winning streak, as investors rushed to lock in profits following the recent rally despite a strong rebound in the latter part of the week.
Analysts said the market came under pressure early in the week as short-term investors booked gains on recently appreciated stocks after the prime index had surged about 365 points over the previous five weeks on the back of budget incentives, tax benefits and growing optimism about regulatory reforms.
However, sentiment improved from midweek as bargain hunters returned to accumulate fundamentally strong stocks such as Square Pharma, Grameenphone and BAT Bangladesh.
The recovery gained further momentum amid easing concerns over potential disruptions in the Strait of Hormuz, as traffic through the key shipping route gradually resumed.
Meanwhile, oil prices came down to pre-war levels as crude oil prices extended their decline to $72.5 a barrel on Thursday last seen before the start of the Iran war, as expectations of rising supply from the Middle East outweighed demand concerns, according to global media.
The appeal of tax rebate ahead of the June closing further boosted investor participation, particularly among institutional and long-term investors in the later part of the week.
Although bargain hunters returned to the market in the last three sessions, helping recover most of the losses, the rebound was not sufficient to keep the benchmark index in positive territory.
The DSEX finally shed more than 8 points, or 0.15 per cent, to close at 5,653, ending the longest winning streak of the year.
"The market witnessed a fair correction after a strong rally," said Akramul Alam, head of research at Royal Capital. "Many investors chose to realise gains while reassessing stock valuations and monitoring policy developments."
The market opened on a cautious note as investors sold banking, engineering and power sector stocks that had recorded sharp gains in recent weeks.
According to Sheltech Brokerage, the market's movement was influenced by increased regulatory scrutiny and half-year-end portfolio rebalancing by investors.
"Selling pressure dominated the first half of the week as investors sought to secure profits, while buying interest gradually strengthened in the latter half of the week following positive signals regarding the capital market outlook," said the stockbroker.
Among the major contributors to the week's decline were Islami Bank, Pubali Bank, BRAC Bank, Beximco Pharma, Mutual Trust Bank and Prime Bank.
On the other hand, gains in heavyweight stocks such as Square Pharmaceuticals, Grameenphone, BAT Bangladesh and BSRM helped cushion the overall fall.
The DS30 index, comprising blue-chip companies, also fell 12 points to 2,131, while the DSES index, which tracks Shariah-based stocks, lost 7 points to 1,143.
Turnover dropped sharply as many investors stayed on the sidelines following the recent rally. Total turnover stood at Tk 47.6 billion, down from Tk 64.2 billion in the previous week, while average daily turnover declined 26 per cent to Tk 9.51 billion.
Investors remained mostly active in the pharma sector, which accounted for 15 per cent of the week's total turnover, followed by engineering and textile sectors.
Market breadth remained negative. Of the 388 issues traded on the DSE, 222 declined, 145 advanced, and 21 remained unchanged.
Among the major sectors, general insurance posted the highest gain of 2.9 per cent, followed by telecom, food and allied and pharmaceuticals while banking, engineering and power sectors faced correction.
Beximco Pharma emerged as the most-traded stock of the week, with shares worth Tk 2.98 billion changing hands following its corporate declarations during the week.
Despite significant challenges, Beximco Pharmaceuticals reported a profit of Tk 6.99 billion in FY25, the highest annual earnings since its stock market listing, driven by strong revenue growth.
Riding on the record earnings, the board of the drug maker declared a 47.5 percent cash dividend for FY25, also the highest cash payout in the company's history.
Meanwhile, the Chittagong Stock Exchange (CSE) followed a similar trend. Its CASPI index fell 205 points to 15,149, while the CSCX index lost 126 points to close at 9,263.
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