KATHMANDU, Oct 14: After opening Wednesday’s session slightly higher, the stock market experienced weakness amid a selling pressure. The Nepal Stock Exchange (Nepse) index fell around 7 points in the morning but attempted a recovery in the afternoon to reach its opening level. However, a second dip towards the closing hours saw the index register a loss of 7.42 points to end at 1,561.17 points.
The stock market extended its losing streak amid profit booking of investors as festive holiday draws closer. The profit booking was seen mostly on sectors which saw massive gains in the past weeks. Hence, the market has slightly lost its momentum after two months of notable upward movement. The drop in the index was also accompanied by decrement in market participation. Only Rs 1.5 billion worth of securities were exchanged on the day.
Barring Hotels index, all sub-indices corrected with Development Bank stocks leading losses. The sub-index corrected 2%. Finance and Hydropower stocks also extended retracement and fell by 1.30% and 1.19%. All other sectors saw modest drops. Heavyweight banks fell marginally.
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Sanima Bank Ltd was the most actively traded scrip of the day. More than Rs 72 million worth of the commercial bank’s shares changed hands after the commercial bank announced its dividend for the year 2019/20. As per its notice to Nepse, the bank proposed 13.6% dividend to its stockholders. The payout includes 10% bonus shares and 3.6% cash dividend.
Nepal Bank Ltd and Nepal Reinsurance Company Ltd’s shares followed suit with turnovers of Rs 61 million and Rs 53 million. Nepal Life Insurance Company Ltd, Arun Kabeli Power Ltd and Jyoti Bikas Bank Ltd were the other top turnover stocks.
General Insurance Company Nepal Ltd rallied 10% on its first day of trading. Similarly, Nepal Finance Ltd jumped almost 10%. Nepal Hydro Developers Ltd’s shares also closed notably higher. The stock rose 5.22%. Ganapati Microfinance Bittiya Sanstha Ltd, NIBL Samriddhi Fund 1 and Bottlers Nepal Terai Ltd also saw strength and closed over 2% higher.
Most of the hydropower stocks dominated the list of major decliners. While Ghalemdi Hydro Ltd tanked over 7%, Barun Hydropower Co. Ltd and Api Power Company Ltd saw losses of 6%. Chhyangdi Hydropower Ltd, Ridi Hydropower Development Company Ltd and Karnali Development Bank Ltd also came under pressure and slumped over 5% apiece.
On the technical front, the index marked a second straight day of decline with a bearish candlestick formation. With the drop, the index has pulled back towards support of 1,550 points and 20-day Exponential Moving Average (EMA) line. Hence, the aforementioned zone can be taken as a key area where a rebound will see uptrend continuation. Else, a breach and close firmly below this level can reflect possibility of further correction.
This column is produced by ARKS Capital Advisors Ltd.
(Views expressed in the article are those of the producer and do not necessarily reflect those of this publication)
www.arkscapitaladvisors.com
