The local benchmark index fell more than 50 points in the first few minutes of trading but attempted a recovery in the morning. Nonetheless, the Nepal Stock Exchange (Nepse) index failed to reach the opening level and traded in the red throughout the remaining trading hours. A steady downfall saw the index tumble more than 120 points on Sunday to settle at 1,932.11.

Following a modest dip on profit booking on Thursday, investors took a more aggressive selling approach fueled by rumors about NRB reviewing the limit on loan against shares. Besides, some normal correction was also due in the market after a rally of over 400 points in the previous month. Hence, the stock market remained under pressure on the day. Market participation was noteworthy with over Rs. 7.2 billion worth of securities being traded on the day.

‘Others’ sub-sector which led the market in the previous rally suffered the most on heavy profit taking. The sub-index tanked 9.13%. Life Insurance sub-index slumped 8.26%. Manufacturing & Processing, Trading and Microfinance sub-indices registered losses of over 7% apiece. All other segments struggled on the day with noteworthy losses.

In terms of stock-wise turnover, Nepal Reinsurance Company Ltd registered turnover of over Rs. 1 billion for a second straight day. Nepal Life Insurance Company Ltd followed suit with a turnover of almost Rs. 450 million. Nepal Telecom Ltd, Upper Tamakoshi Hydropower Ltd and Shivam Cements Ltd were the other active scrips of the day with turnovers of Rs. 321 million, Rs. 295 million and Rs. 287 million. Neco Insurance Ltd, Nabil Bank Ltd and National Life Insurance Company Ltd’s shares were also heavily traded in the day.

Among gainers, Reliance Life Insurance Ltd registered a gain of 2.3%. 10% Himalayan Bank Debenture 2083, Corporate Development Bank Ltd, Narayani Development Bank Ltd and NMB 50 mutual fund units rose more than 1% each. Manjushree Finance Ltd, 10% Prabhu Bank Debenture 2084 and Sanima Bank Ltd Debenture also inched higher.

Deprosc Laghubitta Bittiya Sanstha Ltd, on the other hand, tanked 10%. Nepal Reinsurance Company Ltd, Sanjen Jalvidhyut Company Ltd, Nepal Telecom Ltd, Himalayan Distillery Ltd, Shivam Cements Ltd, Himalayan General Insurance Ltd, Forward Community Microfinance Bittiya Sanstha Ltd, National Life Insurance Company Ltd and Nepal Life Insurance Company Ltd also tumbled almost Rs. 10%.

As per the ARKS technical analysis, the market formed a strong bearish candlestick as sellers resorted to panic selling on rumors. While some retracement was due following massive November rally, the decline has notable momentum making further retracements likely in the coming sessions. Technical indicators also point towards some possibility of downward action. However, a strong support lies at 1,888 point’s mark, where a rebound can see the market extend its uptrend further.

This column is produced by ARKS Capital Advisors Ltd.

(Views expressed in the article are those of the producer and do not necessarily reflect those of this publication)

www.arkscapitaladvisors.com

 
• Nepse
 
• daily_commentary
 
• stock_market_of_Nepal