KATHMANDU, June 26: Stocks suffered on Monday after posting two straight days of marginal gains as the Nepal Stock Exchange (Nepse) index was down 10 points, or 0.80 percent, at the close. The benchmark index finished the day at 1,210.09 points.
Trading activity remained subdued with the equity market experiencing a decline in turnover to Rs 185 million compared to the Rs 209 million on Sunday. Sluggishness prevailed throughout Monday. The market has been witnessing some of the dullest trading sessions of the year lately.
Most of the sectoral indices finished the day in red. Substantial weakness was visible among insurance stocks which dragged Insurance Sub-index down by 1.29 percent. Hydropower stocks were also under pressure as reflected by a decline of 1.14 percent in its sub-index. Only two sub-groups outperformed the broader market as Hotels and Manufacturing/Processing Sub-Indices posted modest gains.
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The most actively traded stock on the bourse on Monday was Samata Microfinance Bittiya Sanstha Ltd, posting a total turnover of above Rs 8 million. Monday was the last trading day for the shares of the microfinance company which is launching 50 percent rights issue on July 11. Besides, mainly banking stocks remained active on the day. Among other, stocks of Nepal SBI Bank Ltd and Nepal Bangladesh Bank Ltd recorded turnovers of more than Rs 6 million each.
In terms of advances, shares of Khani Khola Hydropower Co Ltd was the top gainer as it recovered over 5 percent after reaching an all-time low closing on Sunday. Further, Nepal Seva Laghubitta Bittiya Sanstha Ltd and Hathway Finance Company Ltd saw their share prices surge over 4 percent each.
Meanwhile, Jebils Finance Ltd was the biggest drag, as its saw its share price tumble by 7.41 percent. With the fall, the company's stock price has fallen to the face value of Rs 100. Similarly, shares of Nepal Community Development Bank Ltd nose-dived 7.38 percent. Among others, shares of Nagbeli Laghubitta Bikas Bank Ltd, Shangrila Development Bank Ltd and Barun Hydropower Co Ltd also closed lower.
On announcements, Kamana Sewa Bikas Bank Ltd has scheduled its annual general meeting (AGM) for July 16. Distribution of 5.50 percent bonus shares and 6.50 percent cash dividend is one of the key agendas for the meeting. In the other news, Nagbeli Laghubitta Bittiya Sanstha Ltd is closing book for its 100 percent rights issue on July 5.
ARKS technical analysis indicates that the market will continue its course of decline with the formation of a bearish candlestick on Monday. The market is still guided by the recent indecision seen among investors. With the current descent, the Relative Strength Index (RSI) has now entered the oversold zone suggesting notable weakness in the equity market. Moving Average Convergence/Divergence (MACD) also reinforces RSI's indication as its line remains firmly in the negative territory. Further extension of the trend will likely see the index testing the psychological support of 1,200 points.
This column is produced by ARKS Capital Advisors Ltd www.arkscapitaladvisors.com
(Views expressed are those of the producer and do not necessarily reflect those of this publication)
