Weekly Market Commentary

Stocks close week firmly lower

Published On: December 3, 2021 07:30 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Dec 3: The Nepal Stock Exchange (Nepse) index opened this week’s trading on a weak note with the benchmark losing more than 80 points on Sunday. Weakness prevailed with dips of 21 points and 1 point on Monday and Tuesday. After an attempt of recovery on Wednesday with a 5-point rise, the index extended its losing spree on Thursday with another drop of almost 50 points. Eventually, the stock market closed the review period with a loss of 145.59 points or 5.33% at 2,586.19.

After a sharp recovery at the end of October, the index lost steam from 2,850 mark and has been on a steady decline since. Investors attribute the recent downfall of the equity market to absence of any market friendly amendments in the monetary policy published a week earlier. Turnover dropped further to Rs. 19 billion, which was Rs. 20 billion in the week earlier.

Sensitive Index also mirrored the broader market and dipped 5.50%. Development Bank and Hotels & Tourism sectors were the major laggards with drops of 9.08% and 8.95%. ‘Others’, Life Insurance, Finance, Manufacturing & Processing and Investment sub-indices also suffered and closed over 6% lower. All other sectors dipped firmly.

As per the ARKS weekly technical analysis, the index formed a large red candlestick reflecting significant seller control in the week. The breach of 2,600 mark also suggests possibility of further corrective moves with immediate support at 2,500 mark. Both RSI and MACD indicate short term downtrend in action. A rebound from 2,500, however, will present opportunities to go long in the equity market.

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 thispublication)

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