Stocks extended their losing streak this week as persistent global geopolitical tensions continued to weigh on investor sentiment, triggering sustained sell-offs and heightened uncertainty in the market.
Market participants said equities have faced significant pressure since the Iran-Israel conflict erupted on February 28, prompting jittery investors to offload holdings amid fears of further erosion in asset values.
The escalating crisis has sent shockwaves across global markets, with ripple effects reaching economies far beyond the immediate region, including Bangladesh, which remains heavily reliant on energy imports from the Middle East.
A leading broker said the market downturn was largely driven by concerns over potential energy shortages and rising inflationary pressures stemming from the crisis.
"Investors remained cautious due to ongoing developments surrounding the Middle East war," said Akramul Alam, Head of Research at Royal Capital.
Most investors preferred to stay on the sidelines, closely monitoring the situation in the absence of clear signs of de-escalation, he added.
Debapriya Bhattacharya, distinguished fellow at the Centre for Policy Dialogue (CPD), warned at a seminar on Tuesday that the evolving fuel crisis is exacerbating macroeconomic vulnerabilities and exposing structural policy weaknesses.
He noted that higher import bills are increasing demand for foreign currency, putting additional pressure on foreign exchange reserves.
Bhattacharya also cautioned that prolonged instability in the Gulf region could disrupt remittance inflows, which account for nearly half of total remittances and serve as a key stabiliser of the country's balance of payments.
Against this backdrop, the market opened sharply lower in the opening session of the week, as uncertainty surrounding the geopolitical situation and its macroeconomic implications dominated trader sentiment.
Over the course of five trading sessions this week, the benchmark indices closed lower in four, with only one managing a modest gain.
The benchmark index of the DSE finally dropped more than 96 points or 1.82 per cent to 5,220.
The DS30 index, comprising 30 leading companies, also lost 39 points to 1,980, while the DSES index, representing Shariah-compliant firms, shed 14 points to settle at 1,060.
In its weekly market analysis, EBL Securities said, stocks plunged this week, with investor sentiment weighed down by the ongoing Middle East crisis and prevailing uncertainties over domestic fuel shortage, prompting broad-based sell-offs across the trading board.
Price fall of blue-chip stocks, including BRAC Bank, Square Pharma, Islami Bank, Al-Arafah Islami Bank and Pubali Bank, largely contributed to the market index decline. These five stocks accounted for a 32-point fall in the DSEX.
However, market liquidity improved to some extent this week. Total turnover on the DSE stood at Tk 33.4 billion this week, up from Tk 10.96 billion in the week before as this week saw usual five trading sessions while the previous week saw only two sessions due to public holidays.
Accordingly, the average daily turnover on the prime bourse stood at Tk 6.68 billion, up from 22 per cent over the previous week's average of Tk 5.48 billion.
Investors were mostly active in the Pharma sector as it captured 16.6 per cent of the week's total turnover, followed by engineering (12.4 per cent) and textile (9.8 per cent) sectors.
Gainers outnumbered losers, with 206 issues rising, 172 falling and 12 remaining unchanged among the 390 traded securities this week on the DSE trading floor.
Major sectors posted negative returns. The non-bank financial institutions faced the highest correction of 3.6 per cent, followed by banking, telecom, power and engineering sectors.
Acme Pesticides was the most-traded stock with Tk 1.04 billion in turnover, followed by Orion Infusion, Summit Alliance Port, Khan Brothers and BRAC Bank.
The Chittagong Stock Exchange also ended lower, with the All Shares Price Index (CASPI) plummeting 213 points to 14,701 while the Selective Categories Index (CSCX) shed 119 points to 8,892.
The port city bourse traded 55.6 million shares and mutual fund units, with turnover of Tk 1.88 billion.
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