KATHMANDU, Sept 21: Stocks saw weakness since the beginning of Monday’s trading hour. The Nepal Stock Exchange (Nepse) index tumbled around 60 points in the morning before making a short recovery at mid-day. However, selling pressure intensified in the latter trading hours with the index closing 114.02 points down at 2,698.25. 

Sentiment has remained subdued of late as the index has continued to stretch its correction after hitting 3,200 mark at Mid-August. Changes in the financial and economic front have been pulling the index down with the latest drag being caused by an increase in interest rates. Market participation was moderate on Monday with over Rs. 8.49 billion worth of equities changing hands.

Finance, Hydropower and Development Bank sub-indices fell sharply with the respective sub-indices dipping 8.56%, 6.80% and 6.35%. Investment and Life Insurance sectors also fell by more than 5%. All other segments came under pressure. Banking sub-index tumbled 2.70%. 

Shares of Arun Valley Hydropower Development Company Ltd were traded most. More than Rs. 406 million worth of the energy scrip changed hands. Himalayan Distillery Ltd, Nabil Bank Ltd and United Modi Hydropower Ltd were among other actively traded shares. Api Power Company Ltd, National Hydropower Company Ltd and Nepal Life Insurance Company Ltd were among other actively traded shares. 

Few stocks bucked the trend. Manakamana Smart Laghubitta Bittiya Sanstha Ltd surged 10% extending its rally. Deprosc Laghubitta Bittiya Sanstha Ltd and Laxmi Laghubitta Bittiya Sanstha Ltd closed around 2% higher. Naya Sarathi Laghubitta Bittiya Sanstha Ltd ended 0.14% higher.

Goodwill Finance Company Ltd, Pokhara Finance Ltd, ICFC Finance Ltd, Progressive Finance Ltd, Ghalemdi Hydro Ltd, Himalaya Urja Bikas Company Ltd and United Idi Mardi RB Hydropower Ltd fell to hit the lower circuit of 10%. Other hydropower stocks, finance stocks and development bank stocks followed suit.

As per the ARKS technical analysis, the index formed a strong bearish candlestick breaking its support of 2,780 mark. Hence, sellers remained in control throughout the trading hours. However, the index has closed at its psychological level of 2,700 from where a rebound will indicate short term trend reversal. However, further dip below the line can see the index test its support at the 2,500 mark. 

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) 

 
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