KATHMANDU, Sept 23: The stock market traded in red for the entire session on Tuesday. The Nepal Stock Exchange (Nepse) index fell around 15 points in the morning before holding a ground around at 1,560 points in the afternoon. However, a further dip ensued in the latter trading hours, pulling the benchmark index 22.91 points down to close at 1,546.16.
With the day’s decline, the index saw decent extension of the downward pressure as investors opted for a notable profit booking in almost all sectors. Despite no major financial and economic news, the stock market has witnessed notable charm after lockdown, mainly, as the result of excess liquidity. With interest yields also on the lower side, investors have continued to show substantial enthusiasm to participate in the secondary market. Turnover remained above par with more than Rs 2.8 billion worth of shares being traded in the session.
Development Bank and Hydropower sectors struggled on the day with both sub-indices dropping over 2%. Banking and Finance stocks followed suit as the respective sub-indices fell 1.77% and 1.67%. Non-Life Insurance, Manufacturing & Processing and Life Insurance segments also finished more than 1% lower. All other segments edged lower, while only Trading sub-index inched 0.71% higher.
Shikhar Insurance Company Ltd led the list of active shares with a turnover of Rs 319 million. On the day, the non-life insurer heavyweight announced that it would not be distributing any dividend for the year 2018/19. Nepal Bank Ltd and Nepal Reinsurance Company Ltd’s shares were also heavily traded. The former registered a transaction of over Rs 191 million, while the latter saw a total turnover of Rs 124 million. NMB Bank Ltd and Reliance Life Insurance Ltd followed suit with turnovers of Rs 74 million and Rs 71 million, respectively.
United Finance Ltd rallied for a second straight day with a gain of around 7%. Toward energy stocks, Barun Hydropower Co. Ltd and Panchakanya Mai Hydropower Ltd shot up by 4.65% and 3.67%, respectively. Taragaon Regency Hotels Ltd rose 3.29% and Laxmi Unnati Kosh added 2.13%.
On the other hand, Liberty Energy Company Ltd came under the axe for a third straight day of trading. The newly listed hydropower stock closed 9.88% lower. Most other hydropower stocks also saw sharp corrections on profit booking. Ghalemdi Hydro Ltd and United Modi Hydropower Ltd tumbled over 9% each. Khanikhola Hydropower Company Ltd and Ankhu Khola Jalvidhyut Company Ltd slumped around 8% apiece.
On the technical front, after consolidating around the 1,270 points mark for a couple of days, the upward trend lost some steam with the formation of a firm bearish candlestick. With the drop, the index now rests around the crucial 1,550-point mark. A further drop below 1,330-point level might see the index make further lows. Meanwhile, a rebound from the respective point will mark resumption of the short term uptrend. Both Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) point towards possibility of some more retracement.
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)