KATHMANDU: The Nepali stock market pared all its gains from the last trading day with a gradual decline throughout Tuesday's session. The benchmark Nepal Stock Exchange (Nepse) index finished near its session low at 1,226.18 points – a drop of 8.97 points compared to Monday.
The weakness in the market reflects the lack of any major catalyst to sustain investor confidence. Moreover, the market activity appeared subdued for another session as investors seemed to shrug off anticipation of the upcoming monetary policy. Subsequently, the market registered a subpar turnover of Rs 208 million.
All major sub-indices followed the broader market on Tuesday. Insurance Sub-index registered the worst performance as it was down 1.49 percent at the close. The Development Bank Sub-index also shed over 1 percent. Microfinance stocks were also on pressure in the trading session as its sub-index declined by 0.86 percent.
Nepal Bank Ltd continued to dominate the list of active stocks with its Further Public Offering (FPO) round the corner. Shares of Nepal Bank Ltd worth Rs 26 million were traded on the day. Similarly, shares of NIC Asia Bank Ltd also recorded Rs 26 million worth of transactions. Other active stocks on the day were Grameen Bikas Laghubitta Bittiya Sanstha Ltd and NMB Bank Ltd.
Samata Microfinance Bittiya Sanstha was the top gainer of the day as its share price jumped by nearly 10 percent. The stock has been rallying since its listing in the secondary market. Other securities gaining value on the day include Khanikhola Hydropower Company Ltd, Sanima Equity Fund and Hathaway Finance Company Ltd.
Shares of Radhi Bidyut Company Ltd, on the other hand, continued its correction after reaching an all-time high. After its book closure for 10 percent bonus shares on Tuesday, share prices fell by 4.58 percent. Likewise, Shrijana Finance Ltd also saw its share price drop over 4.08 percent. Shares of Naya Nepal Laghubitta Bikas Bank Ltd and Mithila Laghubitta Bikas Bank Ltd witnessed a drop of almost 4 percent each.
As per the ARKS technical analysis, market extended its short as well as long-term downtrend with formation of a bearish candlestick on Tuesday's trading session. The market had tried to consolidate in the last week, staying above 1,230-point mark. However, with the index breaking that line, it can be expected to test its immediate support which lies at the 1,200-point mark.
Furthermore, with Tuesday's loss, the Relative Strength Index (RSI) has again tilted toward the oversold zone which indicates weakness in the market observed recently. Additionally, Moving Average Convergence/Divergence (MACD) also signals negative momentum in the market which is yet to show signs of easing anytime soon. In conclusion, investors are suggested to maintain a cautious stance in the current circumstance.
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)