Market tumbles as insurance, energy stocks falter

Published On: September 2, 2019 10:36 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Sept 2: Stocks began September on a weak note as the local bourse struggled throughout the trading session on Sunday. After remaining unchanged in the initial trading hour, the Nepal Stock Exchange (Nepse) index came under significant pressure later on as all major sectors gave ground. At the close, the benchmark was down of 11.63 points at 1,184.78 points. 

The stock market continues to make newer lows as the market lacks any impetus to drive the market higher at the current juncture. The financial and economic market is also yet to see any major developments. Persistent selling pressure, which has been seen in the market for more than a month, further dragged the market below 1,200 points. Turnover also remained on the lower side of the spectrum as less than Rs 300 million worth of shares were traded on the day.

On sectoral front, Life Insurance stocks suffered the most as the group's sub-index fell by 2.61%. Hydropower segment was the other major laggard with its sub-index losing almost 2%. Hotels, Non-life Insurance and Manufacturing & Processing sub-indices followed suit with declines of 1.8%, 1.73% and 1.66%, respectively. The heavyweight banking sub-index was also down by 0.66%. All other sectors, except Finance which ended the day marginally higher, closed the day lower.

Nepal Life Insurance Company Ltd logged the highest turnover of the day with almost Rs 20 million worth of the shares traded. More than 10 million units of bonus shares of the company were listed on the exchange for trading in the previous week. Shivam Cements Ltd was next with a turnover of over Rs 12 million. Prabhu Bank Ltd and Nepal Life Insurance Company Ltd Promoter Share logged turnovers of over Rs 10 million each. Kumari Bank Ltd, Nepal Bank Ltd and Sanima Bank Ltd were among other active stocks of the day.

Sabaiko Laghubitta Bittiya Sanstha Ltd and United Finance Ltd outperformed the market notably. Scrips of both the companies hit the upper circuit of 10%. Microfinance stocks followed suit with share prices of Grameen Bikas Laghubitta Bittiya Sanstha Ltd and Adhikhola Laghubitta Bittiya Sanstha Ltd posting gains of 4.9% and 3.77%, respectively. Further, share prices of Karnali Development Bank Ltd, Ghalemdi Hydro Ltd and Arun Kabeli Power Ltd were up by over 2% each.

On the other hand, recently-listed energy stocks – Sanjen Jalavidhyut Company Ltd and Rasuwagadhi Hydropower Company Ltd – led the list of decliners. Share prices of the companies fell by 6.4% and 5.94%, respectively. Oriental Hotels Ltd and Himalayan Power Partner Ltd, likewise, saw their share prices tank 5% each. Other losing scrips of the day were NLG Insurance Co Ltd and Gurans Life Insurance Co Ltd which were down by over 4% each. Share price of Nerude Laghubitta Bittiya Sanstha Ltd also fell by 4.74% after the micro sector lender announced dividend on the day. As per a notice sent to Nepse, the company has proposed to distribute 15% bonus shares and 5.79% cash dividend to its shareholders.

As per ARKS technical analysis, the market formed a third straight bearish candlestick on the daily timeframe. Sellers continue to dominate the market as the index tumbled below 1,200-point mark.

Relative Strength Index (RSI) has further dipped in the oversold territory indicating bearish sentiment still in action. A breach of 1,180-point mark might see further selloff, pushing the index to around 1,160-point level. On the other hand, given the index climbs back above 1,200 points, an upward movement in the short term can be expected.

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