Market stabilizing after short spell of loss due to selling pressure

ShareSansar, March 5:

The share market witnessed a major fall over the past couple of days as the bench mark index of Nepal Stock Exchange Limited (NEPSE), the only stock market of the country, slumped by a whopping 3.11 percent.

The market experts, however, does not see any reason to panic as they believe that the fall was largely triggered by selling pressure.

Nonetheless, they are not unanimous when it comes to the real factor that led to the fall.

While some maintain that the selling pressure was exerted by the sentiment of the share investors to book their profit, others feel that it was the market and the entire economy will not grow much, particularly in the wake of the mid-term review report of the monetary policy, which is also not so positive about the marginal lending.

“The benchmark index tumbled a bit as the investors felt it was high time to book the profit, and I don’t think it has anything to do with the mid-term review of the monetary policy,” said Narendra Sijapati, president of the Brokers’ Association of Nepal.

He went on add that the issue of marginal lending is being blow out of proportion as the central bank has not outlined any plan to tighten or restrict marginal lending.

Not all brokers agree with that observation.

“The fall was basically triggered by the mid-term monetary policy review statement that hinted at tightening of the marginal lending,” said Sandeep Jalan, who operates brokerage firm number 56. “This led to the selling spree in the market that brought the benchmark index down.”

But he is quick to add that the market has already stabilized as the buyers did turn up at the last trading hours calculating it as the right time to buy shares as there are not reasons to believe that the market will go down dramatically.

Chief Executive Officer of Nabil Investment Banking Limited Pravin Raman Parajuli too holds that since the market started to fall on the day the central bank announced the mid-term review of the monetary policy that did not indicate at any major policy shift, the investors got the message that the market will not rise drastically for the rest of the year.

Citing the huge trade volume over the last two days, Parajuli further said that the volume clearly suggests that the market will remain stable in days ahead.

At the end of the day, all agree that there will not be any major upheaval and the market will maintain itself in more or less stable form for most of the rest of the year.