Daily market commentary

Nepse up marginally as investors look past political unrest

Published On: February 4, 2021 08:25 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Feb 4: A sharp sell off early in the morning pushed the local benchmark more than 20 points lower within the first 15 minutes of Thursday’s session. A recovery ensued as the index recouped all of its morning losses by mid-day. The Nepse index plateaued thereafter but managed to close in green on the back of gains seen in some of the composite sectors. Nepse capped the week with a 8.34-point’s daily gain at 2,475.27.

Nepse inched towards a fresh high on Thursday as the stock market attempted to add to its January rally. Despite political unrest and strike, stock market saw upbeat trading with buying interest seen mainly in microfinance and hydropower stocks. Over Rs. 7.61 billion worth of equities were exchanged on the day.

Trading sector jumped 4.51% followed by Microfinance segment which shot up by 3.52%. Hydropower, Manufacturing & Processing, Non-Life Insurance and ‘Others’ sector also ended the day in green. On the other hand, Hotels and Finance sub-indices lost 1% each. Banking, Life Insurance, Development Bank and Mutual Fund segments inched slightly towards red.

Nepal Reinsurance Company Ltd was the most actively traded stock of the day. Over Rs. 275 million worth of the shares changed hands. Deprosc Laghubitta Bittiya Sanstha Ltd and Global IME Bank Ltd registered transactions of Rs. 240 million and Rs. 205 million. Nepal Life Insurance Company Ltd, Janautthan Saumdayic Laghubitta Bittiya Sanstha Ltd, First Microfinance Laghubitta Bittiya Sanstha Ltd and Nepal Telecom Ltd were among other heavily traded stocks.

Microfinance stocks dominated the top gainer’s table. Suryodaya Laghubitta Bittiya Sanstha Ltd, Summit Laghubitta Bittiya Sanstha Ltd, Janautthan Saumdayic Laghubitta Bittiya Sanstha Ltd, Mahuli Samudayik Laghubitta Bittiya Sanstha Ltd, National Microfinance Bittiya Sanstha Ltd, Unnati Sahakarya Laghubitta Bittiya Sanstha Ltd, Support Laghubitta Bittiya Sanstha Ltd, Kisan Laghubitta Bittiya Sanstha Ltd and Grameen Bikas Laghubitta Bittiya Sanstha Ltd remained locked in the upper circuit of positive 10%. Other hydropower and microfinance stocks followed suit.

Meanwhile, Prabhu Life Insurance Ltd and Corporate Development Bank Ltd tanked over 3% each. Nepal Finance Ltd, Mega Bank Ltd, United Finance Ltd and Goodwill Finance Co Ltd also came under pressure with each stock dropping more than 2%.

As per the ARKS technical analysis, the index formed a small spinning top candlestick suggesting some indecision in the equity market. However, a long wick on the lower side suggests that buyers pushed the prices higher from intra-day low ultimately suggesting some strength. Momentum indicator Relative Strength Index (RSI) trending around 70 points toward possibility of extension of the uptrend further. Though a consolidation can be expected in the upcoming sessions, the overall trend favors buyers.

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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