After ending Wednesday's tradingmodestly lower, the Nepal Stock Exchange (Nepse) witnessed continuous declinethroughout Thursday's trading hours. The benchmark index witnessed a decline of1.10 percent to end the week at 1,307.66 points.

Trading activity appeared subdued as thestock market recorded a turnover below Rs 350 million – a drop of over 21percent compared to a day earlier. The low turnover is mainly driven byuncertainty among investors following the budget announcement on Tuesday.

Only the Trading Sub-Index went up by1.46 percent on the day. Notable weakness was visible in Insurance sector asits sub-Index slid 1.66 percent. Hotels, Banking and Hydropower sub-indicesalso fell by more than 1 percent each.

Nepal Telecom led the list of activestocks as the scrip logged a turnover of more than Rs 28 million. Nepal BankLtd followed suit, as Rs 24 million worth of the bank's shares changed hands onthe day. Mirmire Microfinance Development Bank Ltd and Nepal Investment Bankregistered turnovers of Rs 19 million and Rs 16 million, respectively.

Suryodaya Laghubitta Bittiya Sanstha Ltdturned in the best performance of the day, gaining over 2 percent to close atRs 1,670 per unit. Further, share price of Bishal Bazar Company Ltd advanced by1.98 percent. Other top gaining stocks include Progressive Finance Ltd,Corporate Development Bank Ltd and Gurkhas Finance Ltd.

Conversely, shares of Mega Bank Ltdcontinued its losing streak, losing almost for a fourth consecutive day. Stocksof both Naya Nepal Laghubitta Bikas Bank Ltd and United Insurance Company Ltdtumbled over 4 percent each.

In terms of announcement, Nepal Bank Ltdhas applied at the Securities Board of Nepal (Sebon) to issue over 17.68million units of shares through Further Public Operation (FPO). After the FPO,the government's ownership in the bank will stand reduce to 51 percent.

The technical analysis model of ARKSindicates the market extending losses for a third day in a row. As the marketwas unable to find any support in previous sessions, it is very likely to testthe immediate support of 1,300-point again next week.

Relative Strength Index (RSI) slopingdownward indicates that the momentum is weakening. Meanwhile, Moving AverageConvergence/ Divergence (MACD) still shows no conclusive sign of a trend ineither direction. Overall, if the index tests and manages to close above1,300-point mark, the index can be expected to enter a short-term uptrend.

Source: MyRepublica, 1^stJune 2018