KATHMANDU, May 28: The stock market prolonged its losses further as the Nepal Stock Exchange (Nepse) index lost 17.81 points to close at 1,300.41 points on Sunday. The first trading day of the week witnessed a constant decline of the index which dropped 1.35 percent at the close.

Investors remained anxious over the possibility of taxation in the secondary market through the budget for the upcoming fiscal year. Despite turnover showing a slight improvement compared to the earlier trading day, it is still on the lower side comparatively.

The stock market recorded a turnover of Rs 396 million on Sunday. On the sectoral front, all major sub-indices slumped barring the Trading Sub-index. Significant weakness was visible in the hotels sector as the Hotels Sub-index experienced the highest loss of 2.11 percent. It was followed by Hydropower Sub-Index which lost 1.84 percent. Banking Sub-Index was also down 1.18 percent at the close.

Shares of Global IME Bank Ltd led the top list of company in terms of daily turnover with Rs 46 million worth of transactions. Second on the list was Prabhu Insurance Ltd which recorded a turnover of Rs 27.9 million as Sunday was the last trading day prior to its book closure for its 46 percent right issue. The other active stocks on the day were Siddhartha Bank Ltd (Promoters' Shares), Nepal Bank Ltd and Everest Bank Ltd.

With respect to advances, shares of Reliance Finance Ltd gained the most and closed higher by 7.02 percent to Rs 122 per unit. Further, shares of Ridi Hydropower Development Company Ltd and RSDC Laghubitta Bittiya Sanstha Ltd rose by 3.23 percent and 2.41 percent, respectively. Progressive Finance Ltd, on the other hand, declined the most, as its share price fell by 5.74 percent. Other top losers on the day Womi Microfinance Bittiya Sanstha Ltd, Kalika Microcredit Development Bank Ltd, Api Power Company Ltd and Mithila Laghubitta Bikas Bank Ltd -- all declining by over 4 percent.

In terms of major announcement, RSDC Laghubitta Bittiya Sanstha Ltd has announced June 5 as the book closure date for its 60 percent rights issue. The microfinance company will be issuing 2.16 million units of right shares to its shareholders.

As per the ARKS technical analysis model, the market has continued its short term bear run with the index forming a bearish candle on the first trading session of the week. Further, the index has now crossed and closed below its 50-day moving average (MA), exactly at the psychological support of 1,300-point level. The index activity at this level is crucial as it might suggest a possible direction for the market in the new future.

Relative Strength Index (RSI) has further inclined toward the oversold zone as the selling pressure in the stock market is yet to ease off. Moving Average Convergence/ Divergence line has also reached negative territory, suggesting a sustained downtrend in action. Hence, no major force giving impetus to the market has been observed.

 
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