KATHMANDU, Jan 7: The benchmark equity index traded on the upside in the initial trading hour on Sunday. Nonetheless, the Nepal Stock Exchange (Nepse) index returned to its losing ways paring all of the initial gains in the afternoon.
The index fell further towards the close posting a loss of 7.22 point to end the day at 1,170.79 points.
The local bourse stretched its losing run to seven days amid lack of major developments in the financial space. Lackluster trading was, hence, observed on the day with the exchange posting a sub-par turnover of over Rs 310 million.
On the sectoral front, most of the sub-indices closed lower following the broader market. Only 'Others' sub-index ended the day in green. Among decliners, microfinance stocks came under considerable pressure as reflected by a 1.64 percent slump in the group's sub-index.
Similarly, non-life insurance and hydropower scrips posted moves to the downside with the respective sub-indices posting losses of over 1 percent each. Sub-indices of manufacturing & processing and development bank stocks shed 0.98 percent each, while that of life insurance shares dropped 0.72 percent. Heavyweight banking stocks also ended in the red with a dip of 0.68 percent in Banking sub-index.
In terms of market activity, Shares of Nepal Credit & Commercial Bank Ltd logged in the highest turnover of over Rs. 33 million. Shares of Prabhu Bank Ltd also witnessed active trading after the commercial bank announced dividend to its shareholders. The bank has proposed 5 percent bonus shares and 5.263 percent cash payout.
Next, Chhimek Laghubitta Bikas Bank Ltd's shares posted a turnover of over Rs21 million. The microfinance's dividend proposal including 18 percent bonus share and 22 percent cash dividend was disapproved by Nepal Rastra Bank on the day. Citizens Investment Trust and Nepal Telecom Ltd were the other top turnover scrips.
Among gainers, shares of Citizens Investment Trust was the biggest percentage gainer on the day as it saw its share price surge 7 percent. Second on the list of advances, Jebils Finance Ltd posted a gain of 3.60 percent. Nepal Credit & Commercial Bank Ltd also climbed 2.35 percent followed by recently listed Ankhukhola Jalavidhyut Company Ltd which added 2.15 percent.
Mero Microfinance Bittiya Sanstha Ltd and Sanima Equity Fund, meanwhile, shed 2 percent and 1.9 percent, respectively. NMB Microfinance Bittiya Sanstha Ltd, NMB Hybrid Fund-1 and Jyoti Bikas Bank Ltd were among other top gainers.
Conversely, Bhargav Bikas Bank Ltd posted the biggest loss of 7.58 percent on Sunday following the bank's announcement of 6 percent cash dividend. Chhimek Laghubitta Bikas Bank Ltd also shed 5.82 percent following Nepal Rastra Bank's disapproval to its dividends. Sindhu Bikas Bank Ltd and United Insurance Co. (Nepal) Ltd also tumbled over 4 percent each. Additionally, Himalayan Distillery Ltd fell 3.90 percent.
ARKS technical analysis indicates the market forming a bearish candlestick on the daily timeframe as the index hit 1,170 points on the day. Technical indicators also suggest faltering momentum in the present context accompanied by low volume turnover sessions. Nonetheless, the equity market's immediate support lies around 1,160 – 1,165 points where a short term bounce back can be expected.
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)