Daily market commentary

Nepse ends week in red

Published On: August 2, 2019 01:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, August 2: The Nepal Stock Exchange (Nepse) index rallied more than 5 points in the first trading hour on Thursday. However, stocks failed to sustain gains in the latter trading hours and dragged back to the opening level. The benchmark index eventually closed the day 1.74 points lower at 1,263.84 points on the last trading day of the week.

The bourse witnessed improved market activity with a total turnover of Rs 590 million on Thursday compared to Rs 370 million a day earlier.Most of the sectors closed lower following the broader market. Only Microfinance, Life Insurance and Non-life Insurance sub-indices posted marginal gains. Hotels sub-index lost the most and closed 0.6% lower. 'Others' and Mutual Fund sub-indices logged losses of 0.4 % and 0.33%, respectively. Banking, Manufacturing & Processing, Development Bank and Hydropower sub-indices closed the day in red posting minimal losses.Neco Insurance Co Ltd Promoter Share and Grameen Bikas Laghubitta Bittiya Sanstha Ltd were the most actively traded stocks of the day, registering respective turnovers of over Rs 74 million and Rs 35 million. Likewise, Muktinath Bikas Bank Ltd, Nepal Life Insurance Co Ltd Promoter and Nepal Bank Ltd registered turnovers of over Rs 17 million each. Prabhu Bank Ltd, Agricultural Development Bank Ltd and First Microfinance Development Bank Ltd were among other active stocks of the day.Microfinance stocks continued to dominate the gaining sides on Thursday as well. Share price of Sparsha Laghubitta Bittiya Sanstha Ltd price surged by 10% on the day. Similarly, seven micro sector lenders recorded gains over 9% on the day. Among others, shares of World Merchant Banking & Finance Ltd and Dibyashwori Hydropower Ltd closed 9.28%and 7.81% higher, respectively.

On the other hand, United Insurance Co Nepal Ltd continued to suffer for second straight session with a loss of 4.44% on the day. Similarly, Pokhara Finance Ltd, IME General Insurance Ltd, Mahuli Sahayatra Microfinance Bittiya Sanstha Ltd and Guheshowori Merchant Bank & Finance Co Ltd registered declines of over 3% each on their respective share prices.

On announcement front, Everest Bank Ltd published its earnings reports for the fourth quarter of FY2018/19 on Thursday. The commercial bank has reported net profit of Rs 3.04 billion, compared to Rs 2.5 billion in the corresponding quarter of the previous fiscal year. Similarly, Nagbeli Laghubitta Bikas Bank Ltd and Mahuli Laghubitta Bittiya Sanstha Ltd reported 47.18% and 77.53% growth in their respective net profits.

In other news, Laxmi Mutual Fund has decided to distribute 15% cash dividend (including tax) to its shareholders.

As per ARKS technical analysis, the market formed a bearish candlestick on the daily timeframe. But technical indicators still suggest a neutral sentiment with Relative Strength Index (RSI) resting exactly at middle of its spectrum and Moving Average Convergence Divergence (MACD) line trending flat at neutral line. Hence, investors are suggested to be cautious in the present context.

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