Kathmandu, August 4

The domestic share market was splattered in red today as the Nepal Stock Exchange (Nepse) index plunged by 2.49 per cent or 45.12 points to retreat below 1,800 points.

The last time Nepse was at the current level was on July 20, when it had closed at 1,786.84 points

“Investor confidence has dropped seeing the benchmark index fall for the last few consecutive days,” explained Rabindra Bhattarai, a stock market analyst, adding the movement was just ‘normal market correction’ following the massive bull run in the past months.

Nepse index, which has been southbound since last Thursday, had opened at yesterday’s close of 1,813.72 points today. In the initial trading hours, it had dived by 43.82 points, but had managed to recover some of the losses in mid-day trading. However, the optimism could not sustain as the local bourse continued in the downward trajectory in the last trading hour to rest at 1,768.60 points.

Even so, Nepse has soared by 53.6 per cent when compared to the level it was at in the starting of the year.

“Today’s daily turnover and transaction volume were not bad, which should placate investors that the market will most likely rebound in the coming days,” added Bhattarai. “Moreover, the performance of the listed companies that have published their financial reports has been quite impressive.”

The daily transaction of Rs 1.5 billion today was a step up from yesterday’s Rs 1.28 billion. Still, it is hardly close to the transaction of over Rs two billion recorded every day in the previous week. Moreover, today’s floor sheet shows that of the 142 listed firms, whose 2.75 million shares changed hands through 7,734 transactions, only seven companies landed in the green.

The sensitive index, which gauges the performance of class ‘A’ stocks, fell 2.51 per cent or 9.8 points to 380.95 points. The float index that measures the performance of shares actually traded also dropped 2.46 per cent or 3.32 points to 131.37 points.

While the remaining subgroups did not fare so well, trading continued to hold steady at 202.79 points.

Hotels saw the biggest plunge among the subgroups with the sub-index sinking by 4.55 per cent or 102.03 points to 2,142.29 points.

Stock of insurance companies also took a major beating today as sub-index plummeted by 3.38 per cent or 299.5 points to 8,559.02 points.

Development banks lost 2.77 per cent or 52.22 points to close at 1,833.52 points.

Banking, the heavyweight of the country’s only secondary market, dropped 2.34 per cent or 39.93 points to settle at 1,667.25 points.

Hydropower lost 2.21 per cent or 58.7 points to rest at 2,594.46 points. Finance fell two per cent or 17.68 points to 865.28 points.

Similarly, manufacturing and production was down 1.97 per cent or 51.27 points to 2,556.02 points; and the others subgroup shed 1.48 per cent or 12.15 points to close at 810.95 points for the day.