KATHMANDU: The market witnessed considerable selling pressure in the last trading day of the week saw. Despite climbing higher in the morning, the Nepal Stock Exchange (Nepse) index pulled back after hitting 1,320-point mark. The benchmark index plateaued around 1,310 points in the afternoon but gave considerable ground toward the close, ending the day 15.95 points lower at 1,297.47 points.
The week was mainly marked by profit booking as Nepse retraced after hitting a 20-month high of 1,343 points on Sunday. While investors continued to book profits, traders seemed to exit the market to latch on to another swing to the upside. Nonetheless, the correction is the first major one in the 200-point rally which started in the month of December. Hence, the overall bullish sentiment is yet to subside. Further, market participation also remained upbeat throughout the week. Over Rs. 1,384 million worth of shares changed hands on the day.
Most of the sectors mirrored the broader market and closed in red. Only, Life Insurance and ‘Others’ segments closed Thursday’s trading in the positive territory. Banking segment corrected the most as the group’s sub-index was down by 1.83%. Hotels sub-index fell by 1.6%, while Hydropower and Trading sub-indices tanked 1.5% each. Subsequently, Non-Life Insurance, Development Bank and Finance sub-indices logged losses of over 1% each. Other sectors closed the week marginally lower.
Shares of Nepal Life Insurance Company Ltd were traded the most on the day. Shares worth Rs 184 million of the life insurer were traded in the bourse. Shares of Global IME Bank Ltd were also traded actively as reflected by turnover of Rs 155 million. Similarly, Nepal Bank Ltd, Shikhar Insurance Co Ltd and Neco Insurance Co Ltd saw shares worth Rs 58 million, Rs 54 million and Rs 46 million traded, respectively. Other life insurance scrips followed suit.
Among gainers, share prices of Synergy Power Development Ltd rallied 9.47%, while shares of Mithila Laghubitta Bittiya Sanstha Ltd and Kanchan Development Bank Ltd closed over 4% higher. Samriddhi Finance Co Ltd, Nerude Laghubitta Bikas Bank Ltd and Global IME Laghubitta Bittiya Sanstha saw their share prices go up by over 3% each. Global IME Laghubitta Bittiya Sanstha Ltd published its financials for the second quarter on the day, reporting a 300% growth in its net profit to Rs 78 million.
Conversely, Sanima Equity Fund came under significant pressure as its lost 7% on its unit value. Share prices of Manjushree Finance Ltd and Himalayan Urja Bikas Company Ltd were also down by over 5% each. Asha Laghubitta Bittiya Sanstha Ltd, Panchakanya Mai Hydropower Ltd and Civil Laghubitta Bittiya Sanstha Ltd were among other major decliners of the day with losses of over 4% each.
Citizen Bank International Ltd also published its earnings report of the second quarter on the day. The bank’s net profit fell by around 10% year-on-year to Rs 688 million dragged mainly by increased interest expense.
ARKS technical analysis suggests extension of correction with another bearish candlestick formation. Technical indicators also show that the momentum is shifting toward bears slightly. Nonetheless, a strong support lies at 1,280-1,300 points zone. Hence, investors and traders should cautiously monitor the index’s movement in the respective range which might be crucial in determining future course 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)