KATHMANDU, June 1: After ending Wednesday's trading modestly lower, the Nepal Stock Exchange (Nepse) witnessed continuous decline throughout Thursday's trading hours. The benchmark index witnessed a decline of 1.10 percent to end the week at 1,307.66 points.

Trading activity appeared subdued as the stock market recorded a turnover below Rs 350 million – a drop of over 21 percent compared to a day earlier. The low turnover is mainly driven by uncertainty among investors following the budget announcement on Tuesday.

Only the Trading Sub-Index went up by 1.46 percent on the day. Notable weakness was visible in Insurance sector as its sub-Index slid 1.66 percent. Hotels, Banking and Hydropower sub-indices also fell by more than 1 percent each.

Nepal Telecom led the list of active stocks as the scrip logged a turnover of more than Rs 28 million. Nepal Bank Ltd followed suit, as Rs 24 million worth of the bank's shares changed hands on the day. Mirmire Microfinance Development Bank Ltd and Nepal Investment Bank registered turnovers of Rs 19 million and Rs 16 million, respectively.

Suryodaya Laghubitta Bittiya Sanstha Ltd turned in the best performance of the day, gaining over 2 percent to close at Rs 1,670 per unit. Further, share price of Bishal Bazar Company Ltd advanced by 1.98 percent. Other top gaining stocks include Progressive Finance Ltd, Corporate Development Bank Ltd and Gurkhas Finance Ltd.

Conversely, shares of Mega Bank Ltd continued its losing streak, losing almost for a fourth consecutive day. Stocks of both Naya Nepal Laghubitta Bikas Bank Ltd and United Insurance Company Ltd tumbled over 4 percent each.

In terms of announcement, Nepal Bank Ltd has applied at the Securities Board of Nepal (Sebon) to issue over 17.68 million units of shares through Further Public Operation (FPO). After the FPO, the government's ownership in the bank will stand reduce to 51 percent.

The technical analysis model of ARKS indicates the market extending losses for a third day in a row. As the market was unable to find any support in previous sessions, it is very likely to test the immediate support of 1,300-point again next week.

Relative Strength Index (RSI) sloping downward indicates that the momentum is weakening. Meanwhile, Moving Average Convergence/ Divergence (MACD) still shows no conclusive sign of a trend in either direction. Overall, if the index tests and manages to close above 1,300-point mark, the index can be expected to enter a short-term uptrend.

 
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