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Nepse falls after a day of marginal gain

2018-10-04

Stocks traded flat in the initial trading hours on Wednesday. However, a mid-day plunge followed as the Nepal Stock Exchange (Nepse) index witnessed continuous decline for the remaining session. At the end, the benchmark index posted a loss of 10.76 points to close at 1130.60 points.

The bourse witnessed another day of slow trading on the day. Market participation dropped to Rs 374 million from previous session's turnover of Rs 455 million.

All major sub-indices ended on the lower note, except for Trading and Hotels which added 1.85 percent and 0.3 percent, respectively. Major weakness was visible among 'Others' and Hydropower stocks as their sub-indices fell more than 1 percent. Banking and Non-Life Insurance sub-groups followed suit with their respective sub-indices going down by 0.93 percent and 0.88 percent. Besides, Development Bank, Life Insurance, Microfinance and Finance sub-indices posted marginal losses on the day.

Market activity remained largely in favor of commercial banks. NMB Bank Ltd logged the highest turnover of over Rs 26 million. Next, NIC Asia Bank Ltd shares were also actively traded as over Rs 25 million worth of its shares changed hands. Further, shares of Machhapuchhre Bank Ltd and Nepal Life Insurance Company Ltd registered a total transaction of Rs 18 million and 17 million, respectively. Prabhu Bank Ltd, Nepal Bank Ltd, Kumari Bank Ltd and Global IME Bank Ltd were the other active stocks on the day.

Nadep Laghubitta Bittiya Sanstha Ltd led the list of advances for a second straight day as its share price rallied almost 10 percent. Correspondingly, shares of Samata Microfinance Bittiya Sanstha Ltd gained over 7 percent. Likewise, Gurkhas Finance Ltd and Miteri Development Bank Ltd surged 3.7 percent and 3.4 percent respectively. Bishal Bazar Company Ltd and Jebils Finance Ltd also saw their share prices rise by over 2 percent each.

Conversely, shares of Nepal Hydro Developers Ltd and Mero Microfinance Bittiya Sanstha Ltd were the worst performers of the day as their share prices plunged 5.44 percent and 5.07 percent, respectively. Share price of Sindhu Bikas Bank Ltd also fell by over 4 percent on the day. Among others, shares of Mahuli Samudayik Laghubitta Bittiya Sanstha Ltd, Garima Bikas Bank Ltd, Central Finance Co Ltd, and Swarojgar Laghu Bitta Bikas Bank Ltd dropped over 3 percent each.

ARKS technical analysis indicates the market extending its recent short-term downward movement after posting modest gain in the previous day. With the bearish candle formation in the day, the index has closed below the immediate support of 1,234 points.

Further, Moving Average Convergence/Divergence (MACD) and Relative Strength Index (RSI) present the market losing momentum in the current juncture. Hence, investors are suggested to trade cautiously and take long positions only if the market shows a significant sign for a bounce back. Further, if the market stretches losses, the index's activity at the support level of 1,210 points can suggest a possible direction for the near term.

Source: My Republica