KATMANDU, July 2: Local stocks opened the week on a positive note as the Nepal Stock Exchange (Nepse) index recovered 27.18 points on Sunday, after losing more than 125 points the week before. Monday saw a modest gain of 5.32 points, while Tuesday saw the correction continue. In Tuesday’s session, the benchmark plunged 47.5 points, followed by a drop of 4.12 points on Wednesday. However, ending the week on a slightly bullish note, the benchmark rose 19.12 points to recoup losses from previous sessions of the week. Ultimately, Nepse ended the week unchanged at 2.843.
As the end of the quarter approaches, sales remained modest. Payments of taxes, interest and debt by individuals and institutions, due by the end of the month, have intensified selling pressure in recent sessions. In addition, the resumption of economic activities after the relaxation of the ban orders also saw many new traders leave their offices, thus contributing to a relatively low participation in the market. Weekly turnover fell about 40% to Rs. 34.16 billion.
Class “A” shares slightly outperformed the overall market, with the Sensitive Index increasing 0.60%. In terms of sector, hotel and tourism values strengthened, the group average having closed up 2.32%. The microfinance segment finished up 1.92%, while the banking sub-index advanced 0.95%. The mutual fund, manufacturing and processing, and financials indices also closed slightly in the green.
On the other hand, investment and non-life insurance stocks struggled with respective benchmarks falling by more than 2%. In addition, the Hydroelectricity and Life Insurance sub-indices recorded gains of over 1%. The Trading, ‘Others’ and Development sub-indices declined slightly during the period considered.
According to ARKS technical analysis, the market formed a doji candlestick on the weekly period ending a volatile week at the opening level. Therefore, the general theme of uncertainty was observed on the stock market during the review week. With a sharp decline in turnover, strong movements on either side are unlikely, while a slight consolidation can be expected at the current level. Technical indicators also suggest a slightly bearish sentiment in recent sessions. Additionally, on the weekly calendar, as long as the market remains above the previous weekly low of 2,600, the medium-term trend remains bullish.
This column is produced by ARKS Capital Advisors Ltd.
(The opinions expressed in the article are those of the producer and do not necessarily reflect those of this publication)