KATHMANDU: Local stocks remained under pressure throughout Sunday's trading session as the Nepal Stock Exchange (Nepse) index dropped more than 10 points in the initial trading hour. After a failed attempt of recovery after midday, the market saw a steady decline pushing the index 13.70 points lower at 1,319.99 points.
After a reversal from 1,350 points in the beginning of February, sellers have fairly had the upper hand in the local bourse. Consequently, the index is gradually retracing back toward 1,300-point mark.
Profit booking, among others, can be attributed to the decline seen in the market. Further, investors will be keeping a close eye on earnings results which might determine the future course of individual scrips.
Market activity was above par on the day as almost Rs 1 billion worth of shares were traded on the day. All sectors closed in negative territory following the broad slump.
Only Manufacturing & Processing segment closed the day with a modest gain. Losses were led by Hotels sector as the group's sub-index fell 2.73%. Next on the list was Non-life Insurance sub-index which was down by over 2%. Similarly, sub-indices of Banking, Dev Bank and Life Insurance stocks posted declines of over 1% each. All other sectors saw marginal losses.
Leading the actives, Neco Insurance Co Ltd posted a turnover of Rs. 39 million. Banking stocks like Global IME Bank Ltd and NIC Asia Bank Ltd followed suit with turnovers of roughly Rs 35 million each.
Citizen Investment Trust, Nepal Investment Bank Ltd, Prudential Insurance Company Ltd and Nepal Life Insurance Co Ltd were among other active stocks of the day.
Swabhimaan Laghubitta Bittiya Sanstha Ltd saw its share price jump up by 3.88%. Share price of Kanchan Dev Bank Ltd shot up by 3.28%. Share prices of Chhyangdi Hydropower Ltd and Civil Laghubitta Bittiya Sanstha increased by at least 2% each. Shivam Cements Ltd added 1.95% on its share price, while share prices of National Microfinance Bittiya Sanstha Ltd and Vijaya Laghubitta Bittiya Sanstha Ltd advanced by over 1.8% each.
Conversely, Prudential Insurance Co Ltd suffered the most as the non-life insurer saw its share price fall by 5.75%. Share prices of Dibyashwori Hydropower Ltd, Nepal Finance Ltd and Central Finance Co Ltd also tanked over 5% each. Other major decliners include, Oriental Hotels Ltd, Multipurpose Finance Company Ltd and Support Microfinance Bittiya Sanstha Ltd whose share price tanked 4% each.
Global IME Bank Ltd, after merger with Janata Bank Nepal Ltd, published its financials for the second quarter of the current fiscal year. The bank has reported a net profit of Rs. 2.13 billion. The largest commercial bank by capital, consequently, reported a per share earnings of Rs 22.53. Similarly, NMB Bank Ltd, which recently merged with Om Dev Bank Ltd, posted a net profit of Rs 1.63 billion with per share earnings at Rs 28.38.
The market formed another bearish candlestick on the daily timeframe stretching losses for a second consecutive day. Both Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) also indicate sellers prevailing in the market as well as a possibility of further correction.
Hence, investors are suggested to keep a close eye on the support range of 1,280-1,300 points where the index's course can help in gauging short term trend of the market.
This column is produced by ARKS Capital Advisors Ltd
(Views expressed are those of the producer and do not necessarily reflect those of this publication)