Daily market commentary

Nepse posts modest drop in thin Wednesday trading

Published On: October 17, 2019 09:16 AM NPT By: Republica


KATHMANDU: Local stocks struggled since the beginning of Wednesday's session and continued to see weakness throughout the day. The Nepal Stock Exchange dropped around three points in the initial trading hour and traded flat in the afternoon. Following a slight dip in the final trading hours, the benchmark index closed the day at 1,137.03 points – down 5.01 points against the preceding session.

After climbing higher on Tuesday, the Nepse index gave up all of the gains on Wednesday. Hence, indecisiveness has dominated trading in the secondary market in the sessions of late. Meanwhile, investors continue to take a cautious stance with the index stretching its sideways movement. Volume continued to remain on the lower side of the spectrum as the bourse witnessed a turnover of less than Rs 200 million.

Most of the sectors closed the day in red while few bucked the trend. Development Bank, Hydropower and Mutual Fund sectors managed to close the day in green. On the losers' front, 'Others' sector suffered the most dropping 1.31%. Manufacturing & Processing and Hotels sub-indices ensued with losses of 0.78% and 0.73%, respectively. Next, sub-index of microfinance stocks fell 0.54%. Heavyweight banking stocks also suffered with the group's sub-index inching 0.47% lower.

Prabhu Bank Ltd's stocks were heavily traded on the day with more than Rs 54 million worth of the bank's shares being traded. Shares of Nepal Life Insurance Company Ltd followed with a turnover of over Rs 11 million. Mero Microfinance Bittiya Sanstha Ltd and Everest Bank Ltd registered turnovers of Rs 7 million each. NIC Asia Bank Ltd, Nepal Investment Bank Ltd and Agriculture Development Bank Ltd were among other top turnover scrips.

Among advances, Global IME Sammunat Scheme–1 was the biggest percentage gainer as the mutual fund unit rose 3.92%. Similarly, NLG Insurance Company Ltd, Dibyashwori Hydropower Ltd and Muktinath Bikas Bank Ltd posted gains of over 3% each. Universal Power Company Ltd, Manjushree Finance Ltd and Asian Life Insurance Co Ltd followed suit and closed over 2% higher each.

On the other hand, shares of Siddhartha Bank Ltd sank 4.31% as shareholders resorted to selling the bank's shares after realizing its dividend. Mero Microfinance Bittiya Sanstha Ltd's shares also struggled and tumbled 3.44%. Correspondingly, Naya Nepal Laghubitta Bikas Bank Ltd dropped over 3%. Other major losing scrips of the day were Goodwill Finance Co Ltd, Shivam Cements Ltd and National Life Insurance Company Ltd.

The Nepse index, as per the ARKS technical analysis, formed a small bearish candlestick stretching the index's range bound movement further. With the index gyrating between gains and losses in the recent sessions, the market is yet to show any concrete direction. Technical indicators also indicate neutral sentiment in the preset context. Hence, cautious trading is suggested unless the market breaks out from 1,120 points–1,150 points range with notable volume.

This column is produced by ARKS Capital Advisors Ltd
www.arkscapitaladvisors.com
(Views expressed are those of the producer and do not necessarily reflect those of this publication)


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