Stocks
Asian Markets Respond to Powell’s Remarks, Navigate Middle East Crisis
Asian markets experienced fluctuations on Wednesday as Federal Reserve Chairman Jerome Powell’s suggestion that interest rates might remain higher for an extended period counteracted a rebound following the recent Middle East-induced selling.
While investors anxiously awaited Israel’s response to Iran’s missile and drone attack over the weekend, the absence of immediate retaliation shifted attention to the monetary policy stance of the US central bank.
A series of inflation and job data releases in the first quarter, which exceeded expectations, compelled investors to recalibrate their expectations regarding the number of interest rate cuts the Fed might implement this year.
Powell virtually confirmed that interest rates would probably stay elevated for a longer duration than previously anticipated. “Recent data have not increased our confidence and instead suggest that it will likely take more time than expected to regain that confidence,” he cautioned on Tuesday in Washington. “Given the robust labor market and progress on inflation so far, it is prudent to give restrictive policy additional time to be effective and to let the data and the evolving outlook guide our decisions.”
The Fed’s most recent rate guidance, indicated by the “dot plot,” implied three rate cuts for this year, with June being considered for the first reduction. Initially, traders had priced in as many as six cuts at the beginning of the year. However, current predictions suggest only one or two cuts at best, possibly commencing in July or September. Some even argue that the next move could be a rate hike if inflation does not retreat to the Fed’s two percent target.
Powell’s comments align with sentiments expressed by several Fed officials, who have advocated for caution in timing the normalization of rates. Richmond Fed President Thomas Barkin remarked on Tuesday that recent economic indicators did not support the notion of a soft landing for the economy. Meanwhile, Fed Vice Chair Philip Jefferson anticipated a decline in inflation but anticipated that rates would remain elevated due to lingering price pressures.
In New York, the S&P 500 and Nasdaq declined, though the Dow managed to secure a gain. Asian markets displayed mixed performances, with Tokyo, Hong Kong, and Seoul declining, while Shanghai, Sydney, Singapore, Wellington, Taipei, and Manila recorded gains.
“The hawkish stance from Powell wasn’t unexpected, given the persistent inflationary pressures, the strong state of the US economy, and the Fed’s commitment to data-driven decision-making,” remarked Stephen Innes of SPI Asset Management. “Anything less than reaffirming the ‘higher for longer’ stance would likely have raised doubts about the Fed’s credibility.”
Traders remained vigilant regarding developments in the Middle East after Israeli Army Chief General Herzi Halevi warned of a response to Iran’s attack on Saturday, heightening concerns about a broader regional conflict.
Tehran stated that the attack was in retaliation for a strike on the consular annex of its Damascus embassy, which resulted in the death of seven Revolutionary Guards, although it indicated that the matter could be considered closed.
Despite tensions, trading activity remained relatively calm on Wednesday, with oil prices inching down despite crises in the Middle East, Ukraine, and OPEC output cuts.
“Our base scenario is one where tensions remain contained in the Middle East, avoiding a broader conflict that disrupts oil supply,” commented Han Zhong Liang of Standard Chartered.
– Key figures around 0250 GMT –
Tokyo – Nikkei 225: DOWN 0.2 percent at 38,404.45 (break)
Hong Kong – Hang Seng Index: DOWN 0.5 percent at 16,176.21
Shanghai – Composite: UP 1.1 percent at 3,038.92
Dollar/yen: DOWN at 154.65 yen from 154.72 yen on Tuesday
Euro/dollar: UP at $1.0634 from $1.0622
Pound/dollar: UP at $1.2439 from $1.2426
Euro/pound: UP at 85.48 pence from 85.45 pence
West Texas Intermediate: DOWN 0.5 percent at $84.90 per barrel
Brent North Sea Crude: DOWN 0.5 percent at $89.59 per barrel
New York – Dow: UP 0.2 percent at 37,798.97 (close)
London – FTSE 100: DOWN 1.8 percent at 7,820.36 (close)
Dhaka Stock Market DSE, Bourse on the last working day of the week, 12th September, ended with a mixed performance in Indices and hike in Turnover from the previous working session. This information is known from DSE sources.
733 crore 39 lakh taka shares were traded on this day. 108 crore 23 lakh more tradings were done in DSE today compared to the previous workday, 11th September, Shares worth Tk 625 crores 15 lakh shares were traded last time, Wednesday.
The benchmark DSEX added 12.55 points or 5,726 The Shariah-based index DSES gained 4.76 points or 1,245 and the blue-chip index DS30 decreased by 7.05 points or 2,100.
Of the issues traded, 158 advanced, 181 declined and 58 remained unchanged.
Paper Processing & Packaging Limited ranked top gainer on DSE, the share price increased by Tk 12.80 paisa or 9.98 percent. On this day, the share was last traded at Tk 141.00 paisa.
Confidence Cement PLC ranked top loser on the DSE, the share price dropped by Tk -5.00 paisa or 6.82 percent. On this day, the share was last traded at Tk 68.30 paisa.
DSE topped on trade is Linde Bangladesh Limited 61 crore 65 lakh takas of company shares have been traded.
A total of 31 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 41 lakh 19 thousand 413 shares of the companies were traded. The financial value of which is 54 crore 78 lakh taka.
The Financial Institutions Division (FID) under the Ministry of Finance has decided to terminate ATM Tariquzzaman from his role as commissioner at the Bangladesh Securities and Exchange Commission (BSEC). According to an official FID order issued on Wednesday (11 September), he will receive a three-month notice before his dismissal, with his tenure ending on 10 December.
Tariquzzaman had only been appointed as BSEC commissioner on 8 May, following his resignation as Executive Director of the commission. In September 2023, he briefly served as Managing Director of Dhaka Stock Exchange (DSE) before stepping down to take the BSEC role.
The development comes in the wake of the fall of the Hasina-led government on 5 August, after which BSEC Chairman Shibli Rubayat Ul Islam, along with Commissioners Shaikh Shamsuddin Ahmed and Rubana Islam, resigned. However, Tariquzzaman and fellow Commissioner Mohsin Chowdhury chose not to relinquish their positions.
In response, the interim government appointed Khondoker Rashed Maqsood as BSEC chairman, with Ali Akbar and Farzana Lalarukh joining as commissioners.
The political transition also triggered upheaval in the Dhaka Stock Exchange. According to BSEC and DSE sources, seven independent directors of the DSE resigned following the fall of the previous government, creating legal complications for the commission in selecting replacements. The BSEC disregarded the DSE’s recommendations and on 1 September appointed independent directors unilaterally, sparking discontent among DSE shareholders who viewed the decision as arbitrary.
Sources indicated that ATM Tariquzzaman had played a significant role in BSEC’s decision-making, which included appointing independent directors KAM Majedur Rahman, Helal Uddin, and Nahid Hossain—all of whom faced allegations of conflicts of interest. Majedur and Helal were accused of having ties to brokerage houses, while Nahid Hossain, as Additional Secretary of the Financial Institutions Division, was deemed ineligible under the law to serve as an independent director. Majedur Rahman has since refused the position.
The DSE Brokers Association expressed concerns in a letter dated 5 September, accusing the BSEC of making “anti-investor, non-transparent, and self-serving” decisions, leading to instability in the capital market. The association called for a revision of the selection process for appointing independent directors, urging the invocation of Clause 24 of the Demutualisation Act 2013 to form a Nomination and Remuneration Committee with four elected DSE directors to recommend candidates for BSEC’s approval.
Dhaka Stock Market DSE, Bourse on the fourth working day of the week, 11th September, ended with a mixed performance in Indices and hike in Turnover from the previous working session. This information is known from DSE sources.
625 crore 15 lakh taka shares were traded on this day. 62 crore 43 lakh more tradings were done in DSE today compared to the previous workday, 10th September, Shares worth Tk 562 crores 72 lakh shares were traded last time, Wednesday.
The benchmark DSEX added 11.12 points or 5,713 The Shariah-based index DSES gained 5.56 points or 1,240 and the blue-chip index DS30 decreased by 6.92 points or 2,107.
Of the issues traded, 64 advanced, 289 declined and 44 remained unchanged.
Shinepukur Ceramics Limited ranked top gainer on DSE, the share price increased by Tk 1.60 paisa or 10.00 percent. On this day, the share was last traded at Tk 17.60 paisa.
Prime Textile Spinning Mills Limited ranked top loser on the DSE, the share price dropped by Tk 1.50 paisa or 9.32 percent. On this day, the share was last traded at Tk 14.80 paisa.
DSE topped on trade is Agni Systems Limited 32 crore takas of company shares have been traded.
A total of 33 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 1 crore 10 lakh 62 thousand 781 shares of the companies were traded. The financial value of which is 36 crore 38 lakh taka.
