Nepse snaps winning streakSnapping its winning streak, Nepal Stock Exchange (Nepse) last week plunged 94.16 points to settle at 1768.5.
Snapping its winning streak, Nepal Stock Exchange (Nepse) last week plunged 94.16 points to settle at 1768.5.
The index, which had risen to an all-time high of 1881.45 points on July 27, has entered correction mode, according to stockbrokers. Change in the government and crackdown on “black money” inflow also affected market sentiments, they said.
“As the market saw a massive rise in a very short period, a correction was inevitable,” said Harsh Agarwal, Director at Agrawal Securities. “The market also welcomed the appointment of Pushpa Kamal Dahal as the country’s Prime Minister by shedding points.”
Out of nine trading groups, eight posted losses. The insurance sector lost the most—543.76 points—followed by hydropower companies, development banks and hotels.
Daily market turnover, which was hovering around Rs2.5 billion for the past few weeks, shrank to Rs1.5 billion on Thursday. Weekly turnover fell 18.28 percent to Rs7.79 billion.
“The market had reached a saturation point, and the fall is a normal correction,” said Anjan Raj Poudel, Managing Director at Thrive Brokerage. “Moreover, people investing money from legal but untaxed sources panicked and backed out from previously hotcake sectors like insurance and microfinance.” Also, those who received financial information of various companies beforehand booked their profits and have adopted a wait-and-see approach, he said.
Meanwhile, the sensitive index which measures the performance of Class A companies dropped 20.10 points during to close at 380.95. Nepal Bank limited posted the highest turnover of Rs487.2 million. Laxmi Value fund I topped the charts in terms of number of shares traded (3 million units).