Stocks rise amid Middle East tensions
Turnover on the DSE increased by 4.46% to Tk328cr today
The indices of the Dhaka Stock Exchange (DSE) gained positive momentum today (18 June), entering a recovery phase despite ongoing local and global crises, particularly the Iran-Israel conflict.
Market insiders say investor confidence is improving as political uncertainty over the national election eases, partly offsetting worries about the Iran-Israel conflict.Fturn
On Wednesday, the benchmark index, DSEX, advanced by 37 points to close at 4,777. The DSE Shariah Index (DSES) climbed 9 points to 1,043, while the blue-chip index DS30 rose by 17 points to settle at 1,787.
Turnover on the DSE increased by 4.46% to Tk328 crore, compared to Tk314 crore in the previous session. Of the 401 issues traded, 202 advanced, 112 declined, and 87 remained unchanged.
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Several blue-chip stocks posted gains during the session, including Grameenphone, British American Tobacco Bangladesh Company, Robi Axiata, Square Pharmaceuticals, LafargeHolcim Bangladesh, Walton Hi-Tech Industries, Renata, Summit Power, Taufika Foods and Lovello Ice Cream, and Unilever Consumer Care Limited.
A brokerage firm official said the market rose despite global volatility from the Israel-Iran conflict, as investor optimism grew amid positive political signals ahead of elections.
He also noted that local stocks are already undervalued, which cushioned external shocks, but warned that further conflict escalation could drive up inflation, especially with rising oil prices.
Market insiders worry that despite government efforts, the current BSEC leadership has not restored investor confidence.
They said that the recent gains may be a temporary pause in the prolonged downtrend, warning that no initiative will be effective unless the BSEC chairman resigns from his position.
Adding to the challenges, high interest rates and rising gas prices are expected to increase production costs and hurt corporate earnings. Institutional participation remains weak, while retail investors continue to exit the market, deepening concerns about the market's future stability and performance.
Among the top gainers were Central Insurance Company, Zaheen Spinning, Apex Foods, Karnaphuli Insurance, and Republic Insurance Company.
In contrast, First Finance led the list of top losers, followed by Metro Spinning, Peoples Leasing, Fareast Finance & Investment, and SK Trims & Industries.
In its market commentary, EBL Securities noted that the benchmark index retraced to recovery mode, offsetting the previous day's pessimism, as opportunistic investors engaged in bargain hunting with positive expectations for the market's outlook.
The indices remained upbeat throughout the session, supported by renewed interest in fundamentally sound and low-priced stocks. Positive sentiment was also boosted by the BSEC's recent steps to enforce the minimum paid-up capital requirement, it added.
On the sectoral front, the Food sector accounted for the highest turnover at 20.1%, followed by Pharmaceuticals at 15.4% and Banking at 12.4%. Most sectors posted positive returns, with Jute gaining 3.9%, Food 2.7%, and General Insurance 2.6%. However, the Mutual Fund and IT sectors experienced slight corrections, declining by 0.4% and 0.2%, respectively.
Meanwhile, the Chittagong Stock Exchange (CSE) also closed in the green.
The Selective Categories Index (CSCX) rose by 15.0 points, and the All Share Price Index (CASPI) advanced by 23.8 points.
