KATHMANDU, May 30: After coming under pressure early on Tuesday's trading session, the stock market fluctuated throughout the day. Eventually, the Nepal Stock Exchange (Nepse) index closed 9.18 points lower at 1,327.21 points.
Investors had their eye on the much-awaited first federal budget announcement on Tuesday afternoon. Hence, a comparatively passive trading session followed as total market turnover decreased to Rs 422 million against compared to Rs 479 million a day earlier.
Weakness was visible on major sectors as eight out of 10 sub-indices shed values. Mainly, stocks of hotel sector came under pressure on Tuesday as the Hotels Sub-index lost the highest 1.64 percent. Similarly, Banking and Development Bank sub-indices dropped 0.92 percent each. Only Insurance Sub-index ended the day in green.
In terms of market activity, shares of Nepal Merchant Bank Ltd recorded the highest turnover of Rs 30 million. The bank has confirmed the unit share price for its upcoming Further Public Offering (FPO) of over 11 million units of shares at Rs 333 each. The announcement is subject to approval from the Securities Board of Nepal (Sebon). Other active stocks on the day were Premier Insurance Company Ltd and Prudential Insurance Company Ltd who recorded turnovers of Rs 17 million and Rs 15 million, respectively.
Shares of Unnati Microfinance Bittiya Sanstha turned in the best performance on Tuesday as it surged 9.10 percent. Further, price of shares of Samata Microfinance Bittiya Sanstha Ltd went up by 7.02 percent. NIC Asia Growth Fund also saw its share price go up by over 4 percent. Meanwhile, share price of Mega Bank Ltd continued its slump as it lost over 9 percent for the second consecutive day. Kabeli Bikas Bank also saw its share price fall by 7.27 percent. Shares of Nepal Merchant Bank Ltd also slipped over 5 percent following its FPO announcement.
On the corporate front, Taragaon Regency Hotels Ltd published its third-quarter financial statement, reporting an increase in its net profit by 9.79 percent year-on-year. Its earnings for the third quarter stand at Rs 275 million.
Technical analysis model of ARKS indicates that the benchmark index failed to add up to the previous day's gains as the market pulled back slightly towards the 1,325-point level. Consequently, it also failed to close above its 20-day exponential moving average (EMA).
Relative Strength Index (RSI) is trending in the mid zone as no significant movement in either direction is visible. Further, Moving Average Convergence/ Divergence (MACD) has flattened close to the neutral line, suggesting that the market is trending sideways for short term. Hence, investors are suggested to stay cautious in the current juncture as the index is yet to enter into a sustained uptrend.