The benchmark index of the Dhaka Stock Exchange (DSE) tumbled to a one-month low on Sunday, as persistent global geopolitical tensions continued to erode investor confidence.
The market has been under sustained pressure since the outbreak of the Middle East war on February 28, with jittery investors offloading holdings amid fears of further declines in asset values.
Analysts said investors remained cautious over the potential macroeconomic fallout from the ongoing conflict, particularly the risks of fuel shortages and disruptions in power supply.
With no visible signs of de-escalation as the conflict entered its sixth week, global oil prices continued to surge, intensifying concerns in import-dependent economies like Bangladesh.
Adding to the pressure, trading hours on the bourses were reduced by 30 minutes from Sunday as part of the government’s strategy to manage the ongoing energy crisis triggered by the war.
Against this backdrop, the market opened sharply lower on Sunday.
The DSEX, the benchmark index of the DSE, plunged 107 points, or 2.05 per cent, to settle at 5,112 – the lowest level since March 8.
Since the onset of the conflict, the index has shed 488 points, marking a decline of 9.7 per cent. During the same period, the DSE’s market capitalisation eroded by Tk 376 billion.
The DS30 index, comprising blue-chip companies, also dropped 35 points to 1,945, while the DSES index, which tracks Shariah-compliant firms, fell 18 points to 1,041.
Market operators attributed the downturn primarily to fears of energy shortages and rising inflation driven by the Middle East crisis.
Investor sentiment remained subdued amid uncertainties surrounding domestic fuel supply and the broader economic outlook, leading to widespread sell-offs across sectors.
Md Sajedul Islam, a director of the DSE, said risk-averse investors largely stayed on the sidelines, closely observing market trends in the absence of any clear progress toward a ceasefire.
The ongoing conflict has already caused significant volatility in global oil and gas markets, raising concerns about its ripple effects on the global economy and inflation.
Since late February, oil prices have nearly doubled to around $115 per barrel, after Iran effectively blocked the Strait of Hormuz – a critical route for roughly one-fifth of global oil shipments.
Analysts also warned that prolonged instability in the Gulf region could disrupt remittance inflows, a key pillar of Bangladesh’s balance of payments, with nearly half of remittances originating from the region.
“Lingering economic uncertainties and the persistent Middle East crisis overshadowed any temporary relief in investor sentiment,” said EBL Securities, citing the lack of any strong catalyst to revive market momentum.
The decline in major blue-chip stocks, including BRAC Bank, City Bank, Square Pharmaceuticals, Pubali Bank, and LafargeHolcim Bangladesh, significantly contributed to the index fall, accounting for a combined 19-point drop in the DSEX.
Market liquidity also weakened, with total turnover falling 18 per cent to Tk 5.12 billion.
Investors showed relatively higher activity in the pharmaceutical sector, which accounted for 15.5 per cent of the day’s total turnover, followed by textile and engineering stocks.
Losers dominated the trading board, with 354 out of 390 traded issues closing lower, while only 25 advanced and 11 remained unchanged.
Major sectors posted losses, with banking experiencing the highest correction of 1.5 per cent, followed by engineering, non-bank financial institutions, telecom, power, food, and pharmaceuticals.
Asiatic Laboratories topped the turnover chart, with shares worth Tk 152 million changing hands, followed by Acme Pesticides, Summit Port Alliance, and Bangladesh National Insurance.
The Chittagong Stock Exchange (CSE) also ended sharply lower. Its All Shares Price Index (CASPI) fell 228 points to 14,473, while the Selective Categories Index (CSCX) declined 128 points to 8,854.
https://today.thefinancialexpress.com.bd/stock-corporate/dsex-hits-one-month-low-as-middle-east-tensions-weigh-on-market-1775408126
