KATHMANDU: Stocks gyrated between gains and losses in the initial trading hour on Monday with the Nepal Stock Exchange (Nepse) swinging nearly 20 points toward either side of the spectrum before stabilizing at midday. Nonetheless, the market witnessed a choppy session in the latter trading hours with the index maintaining slightly positive bias throughout. At the close, the major average ended the day 3.35 points higher at 1,316.39 points.
With the sellers losing momentum and buyers entering market with caution, the benchmark index has finally found some ground at around 1,300 points level. In the past two weeks, the index saw some of its most volatile trading sessions as investors tried to speculate the impact of the COVID-19 outbreak in the domestic financial market. Nonetheless, the index seems to have found a temporary footing allowing investors to take a breather. The lackluster trading session also saw the market post a 25% drop in daily turnover to Rs 1.62 billion.
Most of the sub-indices edged higher, while a few posted marginal losses. Manufacturing & Processing, Mutual Fund and Hotels sectors suffered minor declines. Microfinance sector made some recovery as its sub-index climbed up by over 1%. Non-Life Insurance sub-index also saw some strength and added roughly 1%. Life Insurance, Finance and Development Bank sectors followed suit. Meanwhile, Banking stocks eked out marginal gain.
Shares of Nepal Life Insurance Company Ltd continued to witness active market participation with over Rs 154 million worth of shares traded on the day. NIC Asia Bank Ltd and NMB Bank Ltd's share followed with turnovers of Rs 128 million and Rs 97 million, respectively. Himalayan Distillery Ltd, Nabil Bank Ltd and Citizen Investment Trust Ltd were among other active stocks.
Microfinance stocks – Civil Laghubitta Bittiya Sanstha Ltd and Janautthan Samudayik Laghubitta Bikas Bank Ltd – recouped some of its prior week's losses as their share prices were up by 9.88% and 8.17%, respectively. Furthermore, Miteri Development Bank Ltd and Ridi Hydropower Development Company Ltd posted gains of over 7% and 6%, respectively. Meanwhile, Gurans Laghubitta Bittiya Sanstha Ltd, Manjushree Finance Ltd and Multipurpose Finance Ltd saw their share prices climb up by 5% each.
Unilever Nepal Ltd and Nepal Seva Laghubitta Bittiya Sanstha Ltd were the biggest laggards of the day as share prices of both the companies tanked by over 5% each. Mountain Hydro Nepal Ltd, Radhi Bidyut Company Ltd and Mahila Sahayatra Microfinance Bittiya Sanstha Ltd were among other major decliners, giving up over 3% each on the share prices.
On technical front, the market formed a small spinning top bullish candlestick which suggests lack of conviction in the market. With indecision looming, selling pressure has definitely eased off while buyers are still staying cautious refraining from taking aggressive buying positions. Technical indicators still indicate downtrend in action while only a substantial rebound and breach of previous high of 1,422 points might indicate a possibility of reversal. Hence, investors are better-off maintaining a watchful stance in the present context.
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)