KATHMANDU: Stocks came under significant pressure on the first trading day of the week. Nepal Stock Exchange (Nepse) index witnessed a steady slump in the beginning trading hours and fell below 1,150 points after mid-session. The secondary market gave further ground in the remaining session to close 17.87 points lower at 1,140.01 points on Sunday.
With the day's slump, the local bourse stretched its rout for seventh straight day, hitting a fresh five-month low. The market has failed to find any significant support as the sentiment remains fairly bearish. Hence, investors continue to exit the market fearing possibility of further downfall. The market also lacks any notable impetus to drive the index higher in the present context. Turnover dropped slightly as the exchange saw total transactions worth Rs 288 million against Rs 376 million in the previous session.
All sectors closed the day in red with heavyweight banks leading the slump. The group's sub-index was down by 1.85%. Hydropower stocks continue to see weakness as the segment's sub-index fell by 1.75%. Microfinance, Non-life Insurance, Hotels, Life Insurance and Manufacturing & Processing sectors also gave ground with all sectors closing over 1% lower each. Further, all other traded sectors suffered on the day with moderate losses.
Shares of Nepal Life Insurance Company Ltd were traded the most on Sunday. More than Rs 18 million worth of the life insurer's scrips changed hands. Next on the list was Nepal Bank Ltd with turnover of Rs 17 million, while Sanima Bank Ltd posted turnover of Rs 11 million. Further, Laxmi Bank Ltd, Shivam Cements Ltd and Mega Bank Ltd registered turnovers of over Rs 9 million each.
Among advances, Reliance Finance Ltd posted the biggest gain of the day despite the market's southbound movement. The finance company's share price shot up by 3.51%. Sindhu Bikash Bank Ltd closely followed with a gain of over 3.23%. While unit price of Nabil Equity Fund climbed up by 2%, National Life Insurance Company Ltd and Everest Insurance Company Ltd added 1.86% and 1.79%, respectively, on their share prices. Nirdhan Utthan Laghubitta Bittiya Sanstha Ltd also posted a gain of over 1% following its declaration to distribute 25% bonus shares and 15.53% cash payout to its shareholders.
In contrast, Ganapati Microfinance Bittiya Sanstha Ltd was the worst performer of the day. Its share price tumbled by over 8%. Similarly, share price of Himalaya Urja Bikas Company Ltd was down by 6%. Shares of Himalayan General Insurance Co Ltd and Dibyashwori Hydropower Ltd also struggled, posting loss of 5% each. Standard Chartered Bank Ltd, Adhikhola Laghubitta Bittiya Sanstha Ltd and World Merchant Banking & Finance Ltd were among other major losers of the day.
ARKS technical analysis indicates the market forming a long bearish candlestick, extending the persistent downward rally which started in early August. Consequently, the index witnessed its worst trading day of the year so far. Technical indicators also showed no sign of reversal as sellers continue to dominate the market. Hence, after breaching the Fibonacci support of 78.6% at around 1,153 points, the market is likely to test its next immediate support at 1,132 points. Meanwhile, a strong support lies at 1,100 points. Investors are suggested to keep a watchful stance and refrain from going long in the present context.
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)