Stocks plunge on first day after prolonged Eid vacation

The indices of the stock exchanges plunged yesterday, the first day following a prolonged Eid vacation, primarily due to economic uncertainty stemming from the prevailing geopolitical crisis caused by the Iran-Israel conflict.

On the day, the DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), dropped by 85 points or 1.45% to settle at 5,778, whereas the blue-chip index DS30 declined by 17 points to 2,014.

Among the traded scrips, 32 advanced, 336 declined, and 27 remained unchanged.

Apparently, market turnover fell to a 3-month low, declining by 17% to Tk367 crore compared to Tk443 crore in the previous session.

Due to the massive downfall, the market capitalisation at the DSE dropped by Tk5,183 crore to Tk6.79 lakh crore.

The port city bourse, Chittagong Stock Exchange (CSE), also settled in the red zone. The selected indices, CSCX and the all-share price index, CASPI, plummeted by 114 and 189 points to settle at 9,940 and 16,534 respectively.

The turnover at the CSE also dropped by over 10% to Tk8.78 crore compared to the previous session.

Market insiders voiced concerns over the potential impact on Bangladesh should an Iran-Israel conflict escalate.

Md Moniruzzaman, managing director of Prime Bank Securities, told The Business Standard, "While Iran's attack on Israel may contribute to negative sentiment in our markets, it is not the primary reason behind today's decline."

He said that reduced buying activity on the first working day after Eid, coupled with dominance by sellers, has led to a significant decline in the index.

EBL Securities, in its daily market review, said that the country's capital bourse experienced a major setback in the first session of the week following the Eid holiday. Investors were rattled on the trading floor, apprehensive of the probable impact of the prevailing geopolitical crisis on the market's momentum.

The indices remained downbeat throughout the session, with the majority of scrips experiencing corrections as sell-offs remained predominant right from the start of the session, it said.

Risk-averse investors preferred to reduce their capital market exposure owing to concerns regarding the market outlook, while most investors remained on the sidelines in order to observe the direction of the market trend, the daily market commentary added.

All sectors displayed dismal returns, with ceramic, non-bank financial institutions, and life insurance exerting the most corrections on the DSE.

Anlimayarn experienced the most significant decline yesterday, with its share price dropping by over 7%. It was closely followed by Makson Spinning, Metro Spinning, Shyampur Sugar, and DBH Finance.

Meanwhile, the majority of bank stocks plummeted due to concerns over mergers between weaker and stronger banks.

Yesterday, the share prices of 25 banks declined, with only six witnessing gains and five remaining unchanged.

Following news of a potential merger between United Commercial Bank (UCB) and National Bank Limited (NBL), UCB shares surged while NBL shares plunged.

In the first trading session after the merger news was published, UCB shares remained unchanged, while NBL stocks fell by around 5%, closing at Tk6.50 each.