KATHMANDU, July 2: Local stocks opened week on a positive note as the Nepal Stock Exchange (Nepse) index recouped 27.18 points on Sunday, following a loss of more than 125 points in the week earlier. Monday saw a modest gain of 5.32 points, while Tuesday witnessed continuation of correction. In Tuesday’s session the benchmark plunged 47.5 points, followed by a 4.12 point’s decline on Wednesday. However, ending week on a slightly upbeat note, the benchmark index rose 19.12 points to recoup losses from the prior sessions of the week. Eventually, Nepse ended the week unchanged at 2,843.

With the quarter-end approaching turnovers have remained modest. Payments of taxes, interests, and debts by individuals and institutions, which will be due by the month’s end, have intensified the selling pressure in the recent sessions. Besides, resumption of economic activities after easing of prohibitory orders has also seen many new traders get off their desks contributing towards relatively low market participation. Weekly turnover dropped by around 40% to Rs. 34.16 billion.

Class ‘A’ stocks outperformed the broader market slightly with the Sensitive Index rising 0.60%. On the sectoral front, Hotels & Tourism stocks saw strength as the group’s average closed up by 2.32%. The microfinance segment ended 1.92% higher, while Banking sub-index advanced 0.95%. Mutual Fund, Manufacturing & Processing and Finance indices also closed slightly in green.

On the other hand, Investment and Non-Life Insurance stocks struggled with the respective benchmarks dipping more than 2%. Further, Hydropower and Life Insurance sub-indices registered gains of more than 1%. Trading, ‘Others’ and Development sub-indices inched marginally lower in the review period.

As per the ARKS technical analysis, the market formed a doji candlestick on the weekly timeframe ending a volatile week at the opening level. Hence, the overall theme of uncertainty was witnessed in the bourse in the week on review. With turnover dropping firmly, strong moves to either side is unlikely, while a slight consolidation can be expected in the current level. Technical indicators also suggest slightly bearish sentiment in the sessions of late. Further, on the weekly timeframe, as long as the market rests above the previous weekly low of 2,600, the medium-term trend remains bullish.

This column is produced by ARKS Capital Advisors Ltd.

www.arkscapitaladvisors.com

(Views expressed in the article are those of the producer and do not necessarily reflect those of this publication)

 
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