NEPSE reels under deteriorating political situation

Kathmandu October 28- The deteriorating political situation and its economic toll caused the Nepal Stock Exchange (NEPSE) index to dive by nearly 30 points yesterday.

The benchmark index, which had shed 6.37 points to rest at 1,121.05 points on Sunday — the first day the country’s only secondary market reopened after the Dashain holidays — continued its freefall and slumped by another 29.32 points or 2.62 per cent to 1,091.73 points the following day. Only two companies managed to record gains yesterday.

NEPSE was southbound throughout the day today and retreated back to settle below the psychological level of 1,100 points after over two months. The last time NEPSE had closed below 1,100 points was on August 13, when it had rested at 1,088.42 points. After recording an all-time high of 1205.84 points on September 15, the local bourse had dipped, but managed to land above 1,100 points until now.

“While this is also a seasonal trend, the political and economic situation has dampened the spirit of stock investors,” explained Rabindra Bhattarai, a stock market analyst. However, he also said that the earlier growth and excitement of investors was not fundamentally supportive and the local bourse was bound to drop.

The sensitive index, which gauges the performance of class ‘A’ stocks, descended 6.69 points to 235.54 points. Likewise, the float index that measures the performance of shares actually traded also shed 2.33 points to land at 77.77 points today. Manufacturing and trading were the only two sub-groups to remain constant at 1,886.14 points and 207.97 points; all the remaining sub-indices landed in the red.

Banking and hydropower subgroups fallen by 3.42 per cent to 1,013.53 points and 3.93 per cent to 1,897.53 points, respectively.

Insurance sub-group dropped 1.91 per cent to 4,654.18 points, development banks by 1.77 per cent to 930.84 points and hotels by 1.22 per cent to 1,808.66 points.

The losses of others and finance subgroups were relatively muted, as they dipped 0.94 per cent to 742.50 points and 0.88 per cent to 558.51 points, respectively.

Altogether 361,616 shares of 83 companies worth Rs 207.21 million were traded yesterday through 1,423 transactions.