Stocks in free fall as Ukraine war heats up global commodity market

Following the 1.57% fall on Thursday, DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), dropped by 2.39% to 6,676 points on Sunday as panicked investors were in a rush to reduce their exposures in stocks.

The Ukraine war that keeps heating the global commodity market up was at the centre of the panic as the investors feared it would raise inflation, production cost and hurt the stock markets and corporate earnings, said analysts.

DSE Director Shakil Rizvi in a social media post said, the Ukraine war was not directly affecting Bangladesh, but its global effects put psychological pressure on stock investors.

Following the western attitude to prefer cooling down the commodity markets than standing beside the war-hit countries, Brent crude oil was pulled back to below $95 a barrel on Friday that shot up to $103 on Thursday.

Global stocks also bounced back on Friday. On the other hand, in the bourses of Dhaka and Chattogram, the bearish sentiment seemed to have intensified on the next session of Sunday. 

Only 10 scrips in the DSE managed to withstand the selling pressure on Sunday, while the decline in prices of 365 scrips eroded more than Tk10,000 crore from the total market capitalisation in the DSE.

The bleeding in the market perplexed the average investors who refrained from triggering buy-sell decisions.

As a result, the daily turnover of the DSE came down to Tk916 crore from Tk1,050 crore in the previous session.

Since the average quality and below-average stocks suffered the sharpest fall, the drops in blue-chip index and Shariah index were less on Sunday.

Shakil Rizvi said many investors are waiting to buy fundamentally-strong shares at cheaper prices and that is how the market is expected to bounce back.

CSCX, the broad-based index of the Chittagong Stock Exchange, dropped 2.42% to 11,708 points.

However, daily turnover at the port city bourse increased to Tk15.57 crore from Tk14.84 crore.