KATHMANDU, JUNE 3

After surging by 4.36 per cent or 81.80 points in the previous trading week, share investors failed to maintain the momentum in the trading week following the government's budget announcement for the upcoming fiscal year on May 29. Consequently, the Nepal Stock Exchange (Nepse) index dropped by 92.78 points or 4.74 per cent in the trading week between May 28 and June 1, even as the turnover, trading volume and number of transactions all went up.

The market was mostly southbound from the start of the trading week. After the announcement of the budget, the market fell sharply as investors lacked clarity on Section 29 of the Finance Bill 2023. Following the clarification from the Inland Revenue Department that the legal arrangement on capital gains tax of five per cent or 7.5 per cent has been maintained on sale of securities invested as not regular business, the benchmark index witnessed some growth on the last day of trading.

The sensitive index, which measures performance of class 'A' stocks, dropped by 4.23 per cent or 15.69 points to 355.62 points in the review period. The float index that gauges performances of shares actually traded also fell by 4.66 per cent to 130.21 points.

Altogether 28.98 million shares were traded during the review week through 155,123 transactions that amounted to Rs 8.95 billion. The weekly turnover rose by 28.75 per cent compared to the previous trading week, when 19.25 million shares had changed hands through 133,714 transactions that had totalled Rs 6.95 billion.

The average turnover in the review week stood at Rs 2.12 billion, compared to the average turnover of Rs 1.73 billion in the previous week. It may be noted that the market was open for just four days in the review and past week.

The benchmark index had opened at 1,959.12 points on Sunday and fell by 17.38 points to 1,941.74 points by the time of closing. The market was closed on Monday on the occasion of Republic Day. On Tuesday, the index slumped by 53.13 points to 1,888.61 points as a reaction to the budget which was announced the previous day. On Wednesday, the benchmark fell further by 38.82 points before gaining 16.55 points on Thursday to settle at 1,866.24 for the trading week.

All the subgroups landed in the red in the review week.

Hotels and tourism led the pack of losers with a slump of 6.98 per cent to 3,730.19 points; followed by Life insurance which fell by 6.74 per cent to 9,422.00 points. Similarly, finance plunged by 6.49 per cent to 1,534.31 points; non-life insurance decreased by 6.23 per cent to 8,962.51 points; development banks by 5.69 per cent to 3,388.59 points; others lost 5.67 per cent to 1,322.35 points; microfinance decreased by 5.36 per cent to 3,418.90 points; hydropower dropped by 4.33 per cent to 2,323.40 points; trading fell by 4.25 per cent to 2,136.20 points; investment lost 3.90 per cent to 64.56 points; banking dropped 3.77 per cent to 1,191.31 points; manufacturing and processing decreased by 2.95 per cent to 4,776.81 points and mutual funds shed 1.09 per cent to 13.62 points.