Dec 28: The equity market opened in green in the morning but a sharp fall in the beginning hour saw the Nepal Stock Exchange (Nepse) index trade in negative territory by mid-day. The benchmark remained under pressure throughout the remaining trading session to register a loss of 39.90 points. Nepse ended Sunday’s trading at 1,998.73.
With the day’s loss, the index has extended its decline for three straight days after reverting from 2,100 level on Wednesday. Hence, investors are approaching the market with notable caution refraining from taking any major buying positions. Consequently, turnover also fell on the day with only Rs. 4.67 billion worth of shares being traded.
Most of the sectors saw notable losses with Hotels and Life Insurance segments suffering the most. The sub-indices fell 4.66% and 3.78%. ‘Others’ and Non-Life Insurance sub-groups closed more than 2% lower. Meanwhile, Banking sub-index lost 1.49% on average. All other sectors ended the day in red.
In terms of market activity, Nepal Life Insurance Company Ltd’s shares were heavily traded with turnover of Rs. 684 million. Nabil Bank Ltd and NIC Asia Bank Ltd followed suit with transactions of Rs. 405 million and Rs. 269 million. Nepal Reinsurance Company Ltd, Citizen Investment Trust and National Life Insurance Company Ltd were the other active stocks.
Narayani Development Bank Ltd’s shares led the list of gainers rallying 10% to hit the upper circuit. Asha Laghubitta Bittiya Sanstha Ltd and Sabaiko Laghubitta Bittiya Sanstha Ltd’s shares also saw strength and rose around 5% each. Summit Laghubitta Bittiya Sanstha Ltd and Suryodaya Laghubitta Bittiya Sanstha Ltd posted gains of over 2% each.
On the other hand, shares of Bishal Bazar Company Ltd and Soaltee Hotel Ltd struggled and tanked more than 5%. Nepal Life Insurance Company Ltd dropped 4.96% and Nepal Hydro Developers Ltd fell 4.64%. Oriental Hotels Ltd, Multipurpose Finance Company Ltd, Nepal Reinsurance Company Ltd and Unilever Nepal Ltd were the other major decliner with losses of 4% each.
As per the ARKS technical analysis, with the formation of a bearish candlestick, the market is pointing towards possibility of further correction. A reversal from 2,100 resistance can also see the index make way lower. However, a strong support lies at 1,900 zone where a rebound can be expected. With momentum subsiding of late, the equity market will likely trade range bound over the short term.
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)