Stocks slide on tariff turmoil after Eid holiday

The equity benchmark index ended lower this week, as jittery investors adversely reacted to the 'reciprocal tariffs' imposed by the US administration.

This is the first trading week after Eid vacation and the imposition of 37 per cent tariffs on Bangladeshi products hit the market sentiment negatively. However, US President Donald Trump announced on April 9 a 90-day 'pause' on reciprocal tariffs for all countries but China.

The US is single largest export destination for garment products of Bangladesh. In 2024, the country shipped $7.4 billion worth of garments to America, making it the third-largest apparel supplier after China and Vietnam.

The market had been on a downward trajectory in the first three days of the week as additional tariff announcements triggered global retaliations and battered investor confidence.

However, the US paused reciprocal tariffs for 90 days on most countries, including Bangladesh, which somewhat helped calm investor worries about market momentum in the later part of the week.

Although the US suspended the additional tariffs, the overall market sentiment remained bearish amid a still-weak underlying market trend.

As a result, the market largely remained bearish as the sellers dominated the trading floor in the first three days, with the equity index shedding 33 points while the last two days ended higher following a 90-day pause on higher tariffs.

DSEX, the key index of the Dhaka Stock Exchange (DSE), finally settled the week 14 points or 0.27 per cent lower at 5,205.

Price fall of selective stocks, such as Islami Bank, Khan Brothers, BRAC Bank, Pubali Bank, Square Pharma and United Commercial Bank, dragged the prime index down as they jointly contributed a 20-point fall of the index.

"Stock ended lower as the US tariff shock spilled concerns over an uncertain market momentum, although a slight recovery in the final two sessions reflected some easing of investor anxiety," said EBL Securities, in its weekly analysis.

Moreover, the extension of the banks' special fund tenure for stock investment until December 2026, also somewhat helped calm investor concerns over the market's momentum, said the stockbroker.

However, cautious investors opted to maintain a watchful stance amid the market's weakened trend and ahead of the upcoming earnings disclosures from listed companies, it added.

The 90-day pause on US tariffs somewhat helped calm investor worries about market momentum in the coming days, said a leading stockbroker.

He said there was a little direct impact of tariff on the Bangladesh stock market as the stock market has already reached its bottom.

Besides, the country's economic situation is improving amid declining interest rates while remittance and exports are growing, he added.

Although the prime index dropped, the investors showed buying interest in blue-chip stocks since optimism somewhat rebounded in the latter part of the week.

Subsequently, the blue-chip DS30 index, a group of 30 prominent companies, advanced more than 13 points to close at 1,928 while the DSES index, which represents Shariah-based companies, rose 5 points to 1,173.

Turnover, a crucial indicator of the market, jumped to Tk 24.34 billion this week, up from Tk 16.27 billion in the week before, as optimistic investors cautiously put funds into selective stocks, aiming for short-term gain.

Consequently, the average daily turnover reached Tk 4.87 billion, 20 per cent up from the previous week's figure of Tk 4.06 billion.

Investors were mostly active in the pharmaceuticals sector, which accounted for 20 per cent of the week's total turnover, followed by the engineering sector (8.0 per cent) and food sector (8.0 per cent).

The major sectors showed negative performance this week. Textile sector experienced the highest correction of 4.8 per cent, followed by power with 2.5 per cent, banking 1.8 per cent, non-bank financial institutions 1.7 per cent and telecom 0.10 per cent.

Bangladesh Spinning Corporation was the most-traded stock with shares worth Tk 1.24 billion changing hands, followed by Beximco Pharma, Beach Hatchery, Shinepukur Ceramics and Sonali Life Insurance.

The Chittagong Stock Exchange (CSE) also ended lower, with CSE All Share Price Index (CASPI) shedding 32 points to 14,509 while its Selective Categories Index (CSCX) fell 8 points to 8,834.

The port-city bourse traded 13.56 million shares and mutual fund units, with a turnover value of Tk 436 million.

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