Market slumps after Eid as Middle East tensions rattle investors

Stocks plunged on Tuesday, the first trading day after a week-long Eid holiday, as investor sentiment weakened sharply due to mounting concerns over potential energy shortages and rising inflation linked to the ongoing Middle East crisis.
Trading on the stock exchanges remained closed from March 17 to March 23 on the occasion of Eid-ul-Fitr, the largest religious festival for Muslims. Upon reopening, the market faced immediate selling pressure as global geopolitical tensions continued to weigh on investor confidence.
Market participants expressed growing anxiety over fuel price volatility amid the ongoing Middle East war, which has heightened fears of a prolonged energy crisis. Bangladesh, heavily reliant on imported fuel-much of it transported through the strategically vital Strait of Hormuz-remains particularly vulnerable to supply disruptions.
Analysts said that uncertainty surrounding the geopolitical situation and its macroeconomic implications prompted investors to adopt a cautious, risk-averse stance.
"The investors remained wary of ongoing developments surrounding the Middle East war and adopted a cautious approach," said Akramul Alam, head of research at Royal Capital.
He added that most investors preferred to stay on the sidelines, closely monitoring the situation in the absence of any clear signs of de-escalation.
The benchmark index of the Dhaka Stock Exchange (DSE) fell by 69 points, or 1.30 per cent, to 5,285, after gaining 35 points in the last session before the Eid holidays.
According to EBL Securities, the market downturn was largely driven by fears of energy shortages and inflationary pressures stemming from the Middle East crisis.
Blue-chip stocks, particularly in the banking sector, played a major role in dragging down the market after experiencing notable gains in recent weeks. Key decliners included BRAC Bank, Islami Bank, Robi Axiata, City Bank, and Prime Bank, which collectively contributed to a 38-point drop in the DSEX.
BRAC Bank alone accounted for a 19.1-point decline in the index, as its share price dropped by 6.1 per cent. Islami Bank followed, contributing a 7-point fall.
The DS30 index, comprising 30 leading companies, dropped 39 points to 2,011, while the DSES index, representing Shariah-compliant firms, lost 8 points to settle at 1,072.
Despite the market decline, trading activity showed a modest increase. Total turnover stood at Tk 4.92 billion, marking a 7 per cent rise from the previous session. The banking sector dominated turnover, accounting for 15.5 per cent, followed by the pharmaceuticals and engineering sectors.
Major sectors suffered losses. The banking sector suffered the steepest decline, falling 2.45 per cent, followed by the telecom, non-bank financial institutions, food and allied, power, pharmaceuticals, and engineering sectors.
Market breadth remained negative, with losers significantly outnumbering gainers. Of the 391 issues traded on the DSE, 243 declined, 121 advanced, and 27 remained unchanged.
The Chittagong Stock Exchange (CSE) also closed lower, with its All Share Price Index (CASPI) falling by 76 points to 14,954, while the Selective Categories Index (CSCX) dropped 47 points to 9,118.

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