Daily market commentary

Turnover drops as Nepse ends Tuesday flat

Published On: January 6, 2021 08:55 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 6: The Nepal Stock Exchange (Nepse) opened Tuesday’s trading on a flat note. However, a dip in the first few minutes of trading saw the benchmark fall more than 20 points. The market recouped its morning losses at mid-day and traded in green in the afternoon. A small correction towards the closing hours saw the index register a modest loss of 3.54 points to end trading at 2,165.60.

The index extended its correction for a second straight day. Nonetheless, losses have remained modest in both of the sessions. Market activity also dipped slightly as investors have refrained from taking aggressive buying position with the market trading close to its all-time high. Despite the recent minor retracements, the overall sentiment in the equity market remains firmly positive.

Hydropower sector bucked the trend as the group’s sub-index shot up by 3.12%. Non-Life Insurance and Development Bank stocks also edged higher. Trading index suffered the most and closed 5.82% lower. Hotels and Banking segments also came under pressure and dipped 1.09% and 0.56%. All other segments ended marginally lower.

Shikhar Insurance Company Ltd’s shares were traded the most with turnover of Rs. 691 million. The non-life insurer heavyweight announced its dividend for the year 19/20, which includes 36.1% bonus shares and 1.9% cash dividend. Nepal Life Insurance Company Ltd and Nepal Reinsurance Company Ltd followed suit with turnovers of Rs. 259 million and Rs. 254 million. Nepal Investment Bank Ltd, NIC Asia Bank Ltd and Nepal Telecom Ltd were among other active stocks.

Shares of Janautthan Samudayic Laghubitta Bittiya Sanstha Ltd rallied 10% on the day. Narayani Development Bank Ltd, Himal Dolakha Hydropower Company Ltd and Ridi Hydropower Development Company Ltd also rallied more than 9% each. Other energy stocks saw considerable strength. Joshi Hydropower Development Company Ltd, Ankhu Khola Jalavidhyut Company Ltd and Ghalemdi Hydro Ltd were among other major gaining stocks.

Salt Trading Corporation corrected sharply after previous day’s surge. Its share price ended 6.16% lower. Himalayan Distillery Ltd and Bishal Bazar Company Ltd also struggled and registered declines of 2.75% and 2.63%. National Microfinance Bittiya Sanstha Ltd, ICFC Finance Ltd and Vijay Laghubitta Bittiya Sanstha Ltd fell more than 2%.

As per the ARKS technical analysis, the market formed a small doji candlestick on the daily timeframe. The candlestick pattern reflects uncertainty amidst tussle between buyers and sellers. After breaching the previous high of 2,100 mark, the index has held ground around the current level. Given the index consolidates in the current range, the market will likely stretch the uptrend further. Immediate support for the market lies at 2,100.

This column is produced by ARKS Capital Advisors Ltd.

(Views expressed in the article are those of the producer and do not necessarily reflect those of this publication)


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