Stocks fall slightly in volatile trading

Published On: January 15, 2020 10:16 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 15: The Nepal Stock Exchange (Nepse) index whipsawed initially at the beginning of Tuesday's trading, dropping sharply to 1,254 points. However, it recouped all the losses within the beginning hour. Nonetheless, sellers prevailed after mid-day pushing the index into the negative territory for the remaining trading hours. Nepse eventually closed 7.48 points lower at 1,263.38 points.

The massive rally which began earlier last week lost some steam on Tuesday. Despite an attempt to climb into green territory, broad selling pressure hit the secondary market as profit booking extended into the session. However, investors view the drop as a minor correction which is necessary for a healthy rally in the bourse. Following huge activity in the preceding session, turnover fell slightly but still managed to remain above one billion rupees.

Corrections were largely seen on Hydropower stocks which suffered notably on Tuesday. The group's sub-index pulled back 1.1%. Non-Life Insurance and Banking sub-indices also dropped by almost 1%. Life Insurance, Mutual Fund, Microfinance and Manufacturing & Processing sectors also witnessed some selling pressure on the day. On the other hand, Trading sector bucked the market trend and shot up by 9.15%, driven mainly by a rally seen in shares of Salt Trading Corporation. Finance sub-index also ended 1.38% higher. 'Others', Hotels and Development Bank sectors also closed the day marginally higher.

In terms of stock wise turnover, Prabhu Bank Ltd Promoter Share registered total transactions of Rs 114 million. Shares of Citizen Investment Trust were also actively traded as reflected by a turnover of over Rs 72 million. Nepal Life Insurance Company Ltd, NIC Asia Bank Ltd and Himalayan Distillery Ltd were among other active scrips of the day.

Rairang Hydropower Development Company Ltd and Salt Trading Corporation, among major advances, shot up to hit the upper circuit of 10%. Meanwhile, Manjushree Finance Ltd and Nepal Finance Ltd's added 9.03% and 7.26% on their respective share prices. Further,  share prices of Panchakanya Mai Hydropower Ltd, Shrijana Finance Ltd, Bishal Bazar Company Ltd and Kanchan Development Bank Ltd went up by over 6% each.

Hydropower stocks led the list of decliners. Share price of Dibyashwori Hydropower Ltd tumbled by 8.62%, followed closely by Barun Hydropower Co Ltd whose share price tanked 6.31%. Saptakoshi Development Bank Ltd also saw its share price tumble by 6.12%. The development bank declared 6% bonus shares on Monday. United Modi Hydropower Ltd and Ridi Hydropower Development Company Ltd, subsequently, lost over 5% on their respective share prices.

ARKS technical analysis indicates the market forming a small bearish candlestick signaling a slight retracement after a continued rally. Following the decline, technical indicators suggest that the market is taking a breather at the moment after reacting to a resistance at 1,180 point level. However, continuous high volumes indicate the market might stretch its winning run further given that the crucial 1,180-point mark is breached.

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)

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