Bangladesh stocks rally as ceasefire hopes boost investor sentiment

Dhaka stocks surged today amid renewed optimism among investors about the economy after US President Donald Trump announced a two-week ceasefire with Iran, subject to the immediate and safe reopening of the Strait of Hormuz.

Oil prices plunged below $100 per barrel, and stocks and bonds surged in global markets today, on hopes for a resumption of oil and gas flows through the Strait of Hormuz, through which one-fifth of the world’s oil and gas and 30 percent of global fertiliser transit.

Bangladesh’s stocks have gained in line with the global markets. The DSEX, the benchmark index of the key bourse, the Dhaka Stock Exchange (DSE), climbed 161.08 points, or 3.12 percent, to close at 5,317.96 today.

This marks the highest point for the premier bourse since March 16, when the index finished at 5,353.94.

“Market sentiment shifted from caution to optimism overnight as easing Middle East tensions and falling oil prices ignited a wave of relief and bargain-hunting for beaten-down stocks,” said SM Galibur Rahman, head of research & strategic planning at Shanta Securities.

Market participation saw a boost today, with turnover reaching Tk 991.59 crore, representing a 66 percent spike from the previous session, according to the DSE.

“DSEX jumps as ceasefire news boosts market sentiment,” said Shanta Securities Research in its daily market review.

The surge was mirrored across other indices. The DSES, representing Shariah-compliant companies, advanced 30.16 points, or 2.88 percent, to 1,075.97. Similarly, the DS30, which tracks blue-chip stocks, also gained.

Of the traded issues, 367 advanced, 15 declined, and 11 remained unchanged.

Shanta Securities Research said market movement was driven by positive changes in the market capitalisation of travel & leisure, bank, and paper & printing scrips amid negative changes in the market capitalisation of debenture, IT, and services & real estate scrips.

Khan Brothers PP Woven Bag Industries Ltd, Summit Alliance Port Ltd and City Bank PLC were the most active shares at the DSE, followed by CME Pesticides Ltd and BRAC Bank PLC. All five except Summit Alliance gained.

The CSE All Share Price Index at the Chittagong Stock Exchange soared 328 points, or 2.26 percent, to close at 14,818.06.

Sheikh Mohammad Rashedul Hasan, managing director & CEO of UCB Asset Management, said it is not uncommon for investors to position their capital based on both local and global headlines - often overreacting in both directions.

“In my view, today’s surge in the index and trading volume is nothing but a reflection of renewed investor confidence amid expectations of de-escalation in the conflict,” he said.