Nepal Stock Exchange (NEPSE) index retreated a further 86 points on Tuesday since the close of trading last week, pretty much in line with the jittery global market sentiments.
The global markets have been spooked by Covid-19 fears, a viral disease which has spread across more than a 100 countries and killed over 4,100 persons, worldwide. As well, the markets have grave concerns over a slowing global economic growth and the drop in the world crude oil demand, which have triggered a sell-off.
The NEPSE index fell 197 points, week-on-week to close at 1,435.70 on Thursday after investors had booked profits by selling banking, trading, hotels and hydropower stocks.
“Today, the investors dumped banking, trading, hydropower, hotels and life insurance stocks, which further dragged down the index,” said one broker.
In recent weeks, the investors on the Nepali stock market were seen lapping up shares they view as a long-term value proposition amid improved market liquidity.
In 2018 and 2019, the market had been bearish, but it bottomed out when the index touched at 1,100, the brokers previously said. Since the fundamentals were good at that level, the buying interest of investors got revived and a sustained rally started at the beginning of 2020.
Bullish market participants say their next target level for the index is 1,700.
The NEPSE index hit an all-time high of 1,888 on July 27, 2016.
Brokers maintain that there is going to be a phase of market consolidation before a sustained rally can push the index past 1,700. The investor sentiments got strengthened after the market index breached the critical 1,300 level during the third week of the current year.
The focus of investors since the beginning of 2020 shifted to stocks that can be held over the long-term and can generate good dividends.
NEPSE’s total turnover on Tuesday was Rs1,076,696,300. The total number of shares traded on the market stood at 2,735,418. There were 9,239 transactions in all and as many as 161 company stocks got traded. The total market capitalization at the end of Tuesday’s trading stood at Rs1,723,913.17 million.
On Tuesday, Nepal Life Insurance Company Limited’s stock was the most traded in terms of value, while Global IME Bank Limited’s shares were the most traded in terms of volume.
The market sentiments this year were buoyed by the biggest merger in Nepal’s banking sector between Global IME and Janata Bank.
Traders, previously, cited lack of liquidity as their biggest concern and the primary reason for the domestic stock market’s underperformance.
Himendra is a senior business editor at the Post. He has worked with major global publications in India and the UAE, and has reported from the UK, Italy, France, China and Kazakhstan.
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