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Dhaka stocks rallied for a second straight session on Tuesday as signs of easing geopolitical tensions and a sharp decline in global oil prices boosted investor confidence.
Market sentiment improved after US President signalled that the war involving Iran could be nearing an end, easing fears of potential fuel supply disruptions.
Global oil prices also retreated sharply, with Brent crude oil plunging more than 7 per cent to $91.94 per barrel on Tuesday after hitting a three-year peak of $120 a barrel on Monday.
Following the development, the market opened with strong buying pressure, and the momentum strengthened throughout the session, leading to broad-based gains across most sectors.
The benchmark index of the Dhaka Stock Exchange (DSEX) surged 148 points, or 2.88 per cent, to close at 5,289, recovering about 380 points in two consecutive sessions. It lost nearly 600 points since the Middle East war began on February 28.
EBL Securities, in its regular market analysis said, the market recovery continued as investors drew comfort from indications of a potential de-escalation in the geopolitical tension and subsiding concerns over immediate fuel supply shocks within the country, which helped ease broader apprehensions surrounding the market's near-term trajectory.
Analysts said bargain hunters returned as prices of fundamentally strong companies dropped to attractive price levels.
"Many strong stocks fell to lucrative price levels after the correction, which attracted buyers," said a leading stockbroker, adding that the institutional investors also increased exposure to banking stocks as valuations became appealing.
Investor confidence received another boost after Bangladesh Bank raised the prior-approval threshold for foreign investors to repatriate capital to Tk 1 billion from Tk 100 million, aligning rules with international practices.
The blue-chip DS30 index rose 63 points to 2,039, while the Shariah-based DSES index added 23 points to 1,058.
The market rally was led by blue-chip stocks including BRAC Bank, Islami Bank, Square Pharmaceuticals, BAT Bangladesh, and Grameenphone, which together contributed roughly 57 points to the DSEX rise.
BRAC Bank added 19.1 points alone as its share price rose 6.2 per cent. Islami Bank added another 14.4 points after announcing a US firm would invest in its subsidiary mCash, strengthening its capital base and digital services.
Market liquidity also improved significantly. Turnover on the DSE climbed 43 per cent to Tk 5.94 billion, up from Tk 4.16 billion in the previous session.
The banking sector accounted for 24 per cent of trading, followed by food at 15.5 per cent and pharmaceuticals at 12.8 per cent.
Gainers sharply outnumbered losers, with 339 of the 389 traded issues advancing, 13 declining and 37 remaining unchanged.
City Bank was the most-traded stock at Tk 371 million, followed by BRAC Bank, Orion Infusion, Robi Axiata, and Khan Brothers.
The Chittagong Stock Exchange also surged, with its All Shares Price Index (CASPI) rising 332 points to 14,820 while the Selective Categories Index (CSCX) climbed 209 points to 9,064.
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