DSEX loses 96 points as energy crisis, Middle East fears spark sell-off

The market’s total capitalisation fell by around Tk6,700crore during the week.

Stocks on the Dhaka bourse plunged in the opening week of trading as concerns over the nationwide electricity and gas crisis, coupled with escalating tensions in the Middle East, triggered widespread selling and pushed the benchmark index to a three-month low.

The DSEX fell 96 points, or around 1.7%, over the week to close at 5,418, extending its losing streak to four consecutive sessions. The blue-chip DS30 index also declined 23 points to settle at 2,072.

Market breadth reflected the depth of the sell-off, with 336 issues losing value against only 27 gaining, while 21 remained unchanged. Despite the sharp fall in share prices, average daily turnover rose 5% to Tk571 crore, suggesting investors were actively offloading holdings amid mounting fears of further losses.

The market’s total capitalisation fell by around Tk6,700crore during the week.

EBL Securities, in its daily market review, said the capital market showed no sign of reversing its bearish momentum as investors remained deeply concerned about the near-term economic outlook.

Persistent gas and power shortages have raised concerns over industrial production and corporate profitability. The escalating conflict in the Middle East has added another layer of uncertainty, prompting investors to adopt a defensive stance and sell shares to limit portfolio losses, EBL Securities noted.

Market insiders said Bangladesh could face additional pressure on its import-export trade and fuel supply if disruptions in the Red Sea worsen. Growing Houthi control over parts of Yemen’s Red Sea coast could threaten shipping through the Bab el-Mandeb Strait, an increasingly important alternative route amid disruptions around the Strait of Hormuz.

Any prolonged disruption to shipping routes could raise transportation and fuel costs, put further pressure on gas and energy supplies, and disrupt exports to major markets in Europe and North America, they said.

Such risks could further squeeze corporate profitability and place additional pressure on the broader economy, fuelling panic among already cautious investors, they added.

The sell-off was broad-based, with all sectors posting negative returns. Travel stocks suffered the steepest correction, falling 5.4%, followed by ceramics at 4.1% and jute at 3.7%.

Textile stocks dominated trading, accounting for 25.9% of total turnover. General insurance followed with 15%, while banks accounted for 11.5%.

United Commercial Bank, Eastern Bank, Islami Bank, BRAC Bank and Beximco Pharmaceuticals were among the major stocks weighing on the benchmark index.

A handful of mutual funds and insurers bucked the broader decline. First Prime Finance Mutual Fund gained 9.95%, followed by EBL First Mutual Fund, which rose 9.30%, while Reliance Insurance advanced 6.99%.

On the other hand, Orion Infusion suffered the biggest decline, falling 9.91%. Lub-rref (Bangladesh) dropped 8.82%, while Sharp Industries lost 8.42%.

The bearish trend was also reflected on the Chittagong Stock Exchange. The CSCX index fell 79 points to 8,993, while the CASPI declined 150 points to settle at 14,715.

Source: The Business Standard