daily market commentary

Nepse continues losing run to end 25 points down

Published On: June 11, 2018 04:00 AM NPT

KATHMANDU, June 11: The stock market started on a lower note on Sunday – the first trading day of the week – and continued rest of the session in the negative territory. At the close, the benchmark Nepal Stock Exchange (Nepse) index was down by 25.43 points at 1,231.64 points.

The stock market carried on with the last week's downward movement. Investors are still in a state of confusion about possible gains calculation and taxation method. A committee formed by the Finance Minister is due to present a study report with recommendation on this issue, making further changes in the method likely. The stock market witnessed a total turnover of Rs 444 million on the day, down from Thursday's turnover of Rs 468 million.

All sub-indices followed the broader market on Sunday. Insurance sector recorded the worst performance on the day as its sub-index fell by 3.37 percent. Hotels and Microfinance sub-indices were also down 2.92 percent and 2.63 percent, respectively. Mega Bank Ltd continued to be the active stocks, recording turnover of over Rs 42 million. Next in the list were Everest Bank Ltd, Nepal Telecom Ltd, and Nepal Life Insurance Company Ltd.

Unnati Microfinance Bittiya Sanstha Ltd was the forerunner in the top gainers' list. Its share price rose by 9.94 percent. Similarly, share prices of Support Microfinance Bittiya Sanstha Ltd and Samata Microfinance Bittiya Sanstha Ltd surged 7.9 percent and 6.03 percent, respectively.

On the other hand, the stock price of Mirmire Microfinance Development Bank Ltd plunged the most, dropping over 8 percent. Other top losing stocks include Progressive Finance Ltd which slid 7.31 percent and Vijaya Laghubitta Bittiya Sanstha Ltd which was down by 6.74 percent.

In terms of announcements, Shangrila Development Bank Ltd has called for its Annual General Meeting (AGM) on July 1. The main agenda of the AGM includes issuance of 2.5 percent bonus shares and 9.30 percent cash dividend. Further, National Hydropower Company Ltd is holding its AGM on June 29.

ARKS technical analysis indicates a bearish candlestick formation as market declined throughout the trading session. With Sunday's downward rally, the benchmark index fell below the support level of 1,250 points. Now, the immediate support lies at the 1,200-point mark. Similarly, Relative Strength Index (RSI) also fell to the oversold zone, indicating strong selling pressure in the market. Moving Average Convergence/Divergence (MACD) is also deviating away from the neutral line, suggesting the downward trend continuation. If Nepse index fails to hold above the support level of 1,200 points, further downward rally can be expected.

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