KATHMANDU, Sept 28: The Nepali stock market saw high volatility in the previous week before ending the week slightly lower. Subsequently, weakness carried over to this week's trading with the Nepal Stock Exchange (Nepse) index dropping over 16 points on Sunday. Despite the market's attempt to make a recovery on Monday, the index could only eke out a gain of over 1 point.
Modest losses came from the remaining three trading days where the index gave up 10 points in aggregate. The index, eventually, closed the week 25.5 points or 2.21% lower at 1,129.80.
The prospect of the stock market's recovery remained murky with the index stretching its losses for 10 consecutive weeks. In the respective period, the index gave up more than 145 points making a fresh six-month low. Though the equity market showed some signs of recovery in the previous week with a 50-point rally in two days, overall sentiment remains bearish with the index giving almost all of those gains in the week on review. Nonetheless, the constant selling pressure has resulted in exhaustion of sellers as volume has dried significantly.
Only Rs 1 billion worth of shares were traded in the week compared to a turnover of Rs 1.89 billion in the week earlier.
Class 'A' stocks also came under pressure as the Sensitive Index dropped 1.94%. On the sectoral front, most of the sectors ended in the red, barring Trading and 'Others' sub-groups which climbed 1.61% and 0.26%, respectively. Hydropower and Non-Life Insurance scrips suffered notably shedding over 4% each.
Manufacturing & Processing sub-index also tumbled 3.6%. Microfinance and Life Insurance sub-indices followed suit with losses of around 2.5% each. Heavyweight banks also gave up ground and closed the week 2% lower. All other sectors closed with moderate decline.
Among actives, Sanima Bank Ltd posted the highest turnover in the week as more than Rs 61 million worth of the scrips changed hands. Shivam Cements Ltd and Prabhu Bank Ltd, subsequently, saw turnovers of Rs 47 million and Rs 41 million. Nepal Life Insurance Company Ltd, Machhapuchhre Bank Ltd and Siddhartha Bank Ltd were among other top turnover scrips with turnovers of over Rs 30 million apiece.
On the announcement front, Samata Laghubitta Bittiya Sanstha Ltd declared 31.58% dividend for the fiscal year 2018/19. The dividend includes 15% bonus shares and 16.58% cash payout.
ARKS technical analysis indicates the market forming a bearish candlestick on the weekly timeframe reflecting sellers' dominance throughout the week.
Both Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicate bearish sentiment persisting in the bourse.
Nonetheless, tapering volumes in the recent sessions indicate that the downfall is losing steam. Further, the market is hovering near its crucial support around 1,100 point zone. Hence, investors should look out for a possible rebound before taking any long position in the equity market.