The prime index climbed 2.3 per cent on Thursday, the biggest single-day gain in more than 31 months, as buoyant investors made fresh bets on blue-chip shares, riding on renewed optimism.
The market rally was largely supported by fundamentally-strong stocks that had become cheap after sharp corrections in recent times. The news that government servants are likely to be allowed to trade in stocks also had a positive influence over the market, according to analysts.
The market started with flying colours and remained upbeat throughout the session experiencing strong buying pressure from investors.
DSEX, the prime index of the Dhaka Stock Exchange (DSE), finally soared 124 points or 2.3 per cent to 5,497, the highest in seven weeks. The DSEX recovered 168 points in the past three days.
Thursday's index rise was the highest in a day since December 1, 2021, when the index soared 144 points, according to the DSE.
"The market heated up as buyers remained predominant throughout the session, which led most of the shares to see price appreciation, adding further strength to the market recovery," said EBL Securities.
The growth in turnover and index -- the two most important indicators of the market -- in general suggests investor confidence is growing in the market, said Minhaz Mannan Emon, managing director of BLI Securities.
Turnover climbed 43 per cent to Tk 7.71 billion from the day before, as investors poured funds on large-cap stocks in anticipation of short-term gains.
"Some fresh funds entered the market as investors received refunds from the latest IPO subscription," said Akramul Alam, head of research at Royal Capital.
A huge amount of funds was stuck in Techno Drug's IPO as the drug maker received Tk 24.87 billion against IPO shares of Tk 1 billion. Investors, who applied for Techno Drug's IPO shares, got back the unused funds on Thursday and put fresh bets on cheap blue chip shares, said Mr Alam.
The news that the government may allow public servants to trade in the share market boosted investor confidence, said Mr Emon, also ex-director of the Dhaka bourse. "Investors rushed to capitalize on oversold stocks deemed to be trading at lucrative prices."
BRAC Bank, Square Pharma, BAT Bangladesh, Best Holdings, and Renata jointly accounted for more than 27-point rise of the index.
BRAC Bank soared almost 5 per cent, helping more than 7-point rise of the index, followed by Square Pharma that rose 1 per cent to move the index up by almost 6 points.
Other blue chip stocks, including multinational companies, such as Unilever Consumer Care, Marico, Berger Paints, Linde Bangladesh, and Bata Shoe also witnessed price appreciation.
Subsequently, the blue-chip index DS30, a group of 30 prominent companies, surged more than 38 points to 1951 while the DSES index, which represents Shariah-based companies, rose 22 points to 1,208.
More than 92 per cent securities saw price appreciation. Out of 396 issued traded, 365 advanced, 13 declined, and 18 issues remained unchanged on the DSE trading floor.
All the large-cap sectors posted positive performance. The non-bank financial institutions (NBFIs) booked the highest gain of 4.55 per cent, followed by telecom, banking, food, power, pharma and engineering sectors.
Orion Pharma, which surged 3.5 per cent, became the most traded stock with shares worth Tk 275 million changing hands, followed by BRAC Bank, Sea Pearl Beach Resorts, Alif Industries, and BAT Bangladesh.
Phoenix Finance was the highest gainer, soaring 10 per cent, while Rupali Life Insurance was the top loser, shedding 3 per cent.
The Chittagong Stock Exchange also ended sharply higher with its All Shares Price Index (CASPI) soaring 306 points to 15,463, while the Selective Categories Index (CSCX) gained 185 points to 9,315.
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