Kathmandu, August 3

The election of new prime minister was unable to lift the secondary market out of the bearish territory as Nepal Stock Exchange (Nepse) index shed 0.7 per cent or 12.75 points to land at 1,813.72 points today.

While the share market movement used to be in tandem with political developments a few years ago, there seems to be a shift in the trend owing to maturity of the secondary market and raised awareness among stock investors.

“Nepse is in a correction mode at present, which had been due for a while considering the market rally,” explained Shreejesh Ghimire, CEO of NMB Capital Ltd.

According to him, while investor sentiment has taken a dip in recent days, the financial reports that have been published so far have mostly been above expectations. “It would be prudent for the investors to adopt caution at this point, but there is no need for panic selling.”

The sensitive index, which gauges the performance of class ‘A’ stocks, fell 0.66 per cent or 2.61 points to 390.75 points. The float index that measures the performance of shares actually traded also dipped 0.61 per cent or 0.82 points to 134.69 points.

With many stock traders seemingly wary of entering the market, the daily turnover — which had surpassed Rs two billion every day of the week in the past week — stood at Rs 1.28 billion today. Extension of trading hours in the country’s only secondary market and reduction in brokerage charge had been attributed as the main reasons for surge in transaction amount as well as volume in the past week.

Dipak Kafle, a stock market analyst, meanwhile, said over-speculations could be fuelling the bearish market sentiment as well. “Considering the performance of the listed companies that have published their financial reports, share investors should have been filled with optimism at this point.”

Apart from trading sub-index, which has remained constant at 202.79 points since June 28, all the subgroups landed in the red today.

Manufacturing and production subgroup was the major loser, as the sub-index dropped by 1.56 per cent or 41.4 points to 2,607.29 points, weighed down by Bottlers Nepal (Tarai) plunging by Rs 607 to Rs 7,243.

Trailing close behind, finance fell 1.18 per cent or 10.55 points to 882.96 points, mostly because of Citizen Investment Trust slumping by Rs 125 to Rs 5,125.

Banking — the subgroup with highest weightage on the benchmark index — shed 0.78 per cent or 13.48 points to 1,707.18 points because of commercial banks like Nabil down Rs 55 to Rs 2,385, and Standard Chartered down Rs 25 to Rs 3,650, among others.

Likewise, hydropower dipped 0.66 per cent or 17.58 points to 2,653.16 points; development banks dropped 0.58 per cent or 11.01 points to 1,885.74 points; hotels fell 0.48 per cent or 10.89 points to 2,244.32 points; and insurance was down 0.38 per cent or 33.82 points to 8,858.52 points.