KATHMANDU, July 6: The Nepal Stock Exchange (Nepse) index opened the session slightly in green before reverting towards the opening level. The index climbed over 10 points briefly in the morning, but witnessed a strong pullback dragging the index in red. Stocks saw lackluster trading thereafter hovering close to the opening level throughout Tuesday’s session. At the close, Nepse ended 5.24 points lower at 2,818.11. 

Volatility in the stock market has subsided firmly as the index has remained confined mostly between 2,800 and 2,850 mark in the past five sessions. The range bound trading signals lack of decisiveness in the current context. Further, with market participation dipping, more investors are taking a watchful stance ahead of the unveiling of monetary policy, which is due in few weeks. Market participation also remained subdued as only Rs. 4.22 billion worth of equities changed hands. 

Majority of the segments closed with negative bias. Investment Index took a major hit and fell 2.2%. Hydropower sub-index followed suit with a dip of 1.73%. Trading sector ended 1.02% lower. Hotels & Tourism, ‘Others’, Mutual Fund, Finance and Development Bank sectors ended marginally lower. 

On the other hand, Non-Life Insurance and Manufacturing & Processing sector closed with gains of over 1% each. Banking, Life Insurance and Microfinance sectors eked out moderate gains. 

Himalayan Distillery Ltd led the list of active stocks as over Rs. 358 million worth of the shares changed hands. Upper Tamakoshi Hydropower Ltd and Nepal Bank Ltd followed suit with turnovers of Rs. 205 million and Rs. 137 million. Nepal Infrastructure Bank Ltd, National Hydropower Company Ltd and Hydroelectricity Investment & Development Company Ltd were the other top turnover stocks of the day. 

Rastriya Beema Company Ltd saw the biggest percentage gain of the day. The non-life insurer’s share price rallied 8.31%. Following closely, Mountain Energy Nepal Ltd shot up by 5.21%. Civil Laghubitta Bittiya Sanstha Ltd, Corporate Development Bank Ltd and Summit Laghubitta Bittiya Sanstha Ltd closed over 3% higher. Shivam Cements Ltd, Standard Chartered Bank Ltd and Oriental Hotels Ltd also ended in positive territory. 

Hydroelectricity Investment & Development Company Ltd and Upper Tamakoshi Hydropower Ltd suffered the most with both stocks tumbling over 5%. Ridi Hydropower Development Company Ltd and National Hydropower Company Ltd’s shares also came under pressure and fell around 4% each. Nepal Insurance Company Ltd, Radhi Bidyut Company Ltd and Joshi Hydropower Development Company Ltd registered declines of over 3% apiece.

As per the ARKS technical analysis, the index formed a small bearish candlestick on the daily timeframe suggesting continuation of bearish pressure. However, modest declines in the past sessions suggest loss of momentum. Technical indicators also signal short term downward move in action. Immediate support of the market lies at 2,800 mark, where the index’s movement will be crucial in determining the plausible direction of 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 this publication)

 
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