Nepse inches lower as buyers hold back

Published On: November 7, 2019 09:19 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: The Nepal Stock Exchange (Nepse) index traded slightly higher in Wednesday morning but quickly surrendered its gains by the first trading hour. Subsequently, Nepse traded the latter trading hours in red, only slightly off its opening level. The bourse closed the session at 1,138.02 points, down modest 1.44 points against Tuesday's close.

The benchmark index continued to stretch its consolidation theme amid irresolute outlook in the equity market. Both buyers and sellers remained hesitant to take major positions with minute fluctuations seen in most of the traded stocks. Hence, another insipid session was witnessed as the exchange saw a total turnover of only Rs 206 million.

Most of the sectors ended marginally down following the broader market, while a few segments bucked the trend. Trading group shot up by 5.91% on the back of substantial gains coming from Salt Trading Corporation. Besides, Life Insurance, Microfinance and Mutual Fund sub-indices also edged higher. Conversely, 'Others' sector suffered with a 1.06% decline in the group's sub-index. Sub-indices of Finance, Development Bank, Hotels and Hydropower stocks gave up at least 0.4% each. Manufacturing & Processing and Non-Life Insurance segments also saw meager drops. Heavyweight banks ended the day unchanged.

Prabhu Bank Ltd's shares continued to trade actively as more than Rs 43 million worth of the bank's shares changed hands on Wednesday. Next, Nabil Bank Ltd's shares registered a turnover of over Rs 10 million. Commercial Bank stocks followed suit. Nepal Credit and Commerce Bank Ltd and NIC Asia Bank Ltd saw total transactions of Rs 8 million each. Agriculture Development Bank Ltd, Nepal Bank Ltd and Machhapuchhre Bank Ltd were among other actives.

Salt Trading Corporation logged in the best performance of the day with its share price rallying to hit the upper circuit of 10%. Naya Nepal Laghubitta Bikas Bank Ltd also surged 5.75% following the microfinance's dividend announcement. As per its notice to Nepse, it declared 20% stock dividend to its shareholders for Fiscal Year 2018/19. Next, Synergy Power Development Ltd added 4.17%. Gurans Life Insurance Company Ltd also rose 4% on its dividend news. The insurer announced 13.10% bonus shares to its shareholders for the fiscal year 2017/18. Further, National Hydropower Company Ltd, NMB Microfinance Bittiya Sanstha Ltd and Nepal Investment Bank Ltd Promoter Share posted gains of over 3% each.

On the other hand, Mahalaxmi Bikas Bank Ltd led the list of decliners tumbling 4.28%. Subsequently, Union Hydropower Ltd, Goodwill Finance Co Ltd, Tinau Mission Development Bank Ltd and Arun Valley Hydropower Development Co Ltd sank over 3% each. Other losing scrips on the day were Multipurpose Finance Company Ltd, Universal Power Company Ltd and Radhi Bidyut Company Ltd.

As per the ARKS technical analysis, the index extended its sideways movement hinting lack of conviction in the equity market. Despite the formation of a small bearish candlestick the selling pressure lacks any real momentum behind the move. Meanwhile, the daily Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) indicate neutral sentiment. The current strategy would still be to take a wait and watch stance, unless a breach of 1,150 point resistance is observed which might make way for bulls to drive the market higher.

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)

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