Local stocks on Wednesday morning came under some pressure and declined marginally in the initial trading hour. Subsequent dropping to 1,135 points at noon, the Nepal Stock Exchange (Nepse) index plateaued to close the day at 1,135.16 points with a loss of 4.80 points related to Tuesday’s close.
The continuous drops can be taken as correction following relatively large advance that came on Monday. Nevertheless, the present movement also implies that the market is losing to make a sustained rally as uncertainty continues to influence the equity market.
The market has been in a sloping trend for nearly 2 months now with both buyers and sellers denying each other. Investors also seem unwilling to take major positions with another low volume trading session reported on Wednesday. Rs. 275 million worth of securities were traded.
Most of the sectors fell mirroring the broader market. Mutual Fund sub-index sustained and shed 1.22 %. Manufacturing & Processing and Life Insurance stocks also saw some pressure with the respective sub-indices falling 0.84 % and 0.81 %. Banking, Hydropower, Hotels Development Bank and Non-Life Insurance segments posted modest moves to the downside. In contrast, the Trading group jumped 5.09 % as Salt Trading Corporation continued to rally. Finance and Other sectors crawled marginally higher.
NMB Bank Ltd proceeded to trade actively following its dividend announcement. The bank’s scrip saw a total transaction of over Rs 31 million on the day. Machhapuchhre Bank Ltd and Salt Trading Corporation’s shares followed suit with turnovers of at least Rs 20 million each. Nepal Investment Bank Ltd and Nepal Bank Ltd, consequently, logged in turnovers of Rs 18 million and Rs 15 million.
The highest gains arrived from Salt Trading Corporation as its share price shot up by almost 8 %. Microfinance stocks followed as Sabaiko Laghubitta Bittiya Sanstha Ltd, Adhikhola Laghubitta Bittiya Sanstha Ltd, and Mithila Laghubitta Bittiya Sanstha Ltd posted gains of 6.46 %, 5.71 %, and 5.18 %, respectively. Mountain Hydro Nepal Ltd, Universal Power Company Ltd, and Gurkhas Finance Ltd were among other top advances.
On the other hand, Nepal Insurance Company Ltd’s shares tanked the most on Wednesday. The scrip’s price fell 5.51 %. Nepal Investment Bank Ltd also dropped 4.35 % after the commercial bank declared a 19 % dividend including 10.5 % bonus shares and an 8.5 % cash payout for the year 2018/19. The bank had issued 18 % bonus shares and a 22 % cash dividend in the previous financial year. Moreover, Support Microfinance Bittiya Sanstha Ltd, Swadeshi Laghubitta Bittiya Sanstha Ltd, and Prime Life Insurance Company saw declines of over 3 % each.
Kamana Sewa Bikas Bank Ltd also declared its dividend for the year 2018/19. As per its notice to Nepse, the class ‘B’ financial institution will be sponsoring a 6.8 % cash dividend to its shareholder’s subsequent approval from its upcoming Annual General Meeting (AGM). The scrip edged marginally lower on Wednesday.
On the ARKS technical front, the market extended its correction following Monday’s gain with a bearish candlestick formation on the daily timeframe. Besides range-bound trading is witnessed with the market showing no clear direction. The consolidation phase has expanded amid very low volatility experienced in the equity market of late. Investors should, hence, look for a breakout outside 1,120 to 1,150 points zone, which might point out the plausible course of the Nepse index.
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