Daily Market Commentary

Stocks snap winning momentum with 29-point decline

Published On: February 9, 2021 09:33 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Feb 9: The equity market opened Tuesday’s session in green but gave up its gains in the latter trading hours. After trading briefly in red in the morning, some recovery in the bourse ensued. However, with active profit taking seen in majority of sectors, selling pressure was evident in afternoon trading hours. Nepse ended the day with a loss of 29.01 points at 2,532.46.

Following confidence fueled trading in the week earlier, the equity market saw some retracement as most of the sectors came under pressure as traders resorted to booking their gains. Most of the composite indices, hence, ended the day in red. Turnover also fell slightly. The equity market registered a turnover of Rs. 8.14 billion against Rs. 10.62 billion in the session earlier.

Only Finance and Development Bank sectors ended the day in positive territory with gains of around 1% each. Losses came mainly from microfinance stocks as the sector corrected 2.69%. Non-Life Insurance and Manufacturing & Processing segment followed with losses of 1.71% and 1.64%. Hydropower, ‘Others’, Hotels, Trading & Life Insurance segments also came under pressure shedding over 1% each.

Grameen Bikas Laghubitta Bittiya Sanstha Ltd was the most actively traded stock of the day. Over Rs. 347 million worth of the micro-sector lenders shares changed hands. Prabhu Bank Ltd and Global IME Bank Ltd were the other heavily traded scrips with each registering transactions of Rs. 306 million and Rs. 294 million. Deprosc Laghubitta Bittiya Sanstha Ltd, NIC Asia Bank Ltd, Nepal Life Insurance Company Ltd and Himalayan Distillery Ltd were among other top turnover stocks.

Finance stocks were the day’s major winners. Goodwill Finance Company Ltd, Shree Investment & Finance Company Ltd and Samriddhi Finance Company Ltd rallied almost 10%. Kalika Power Company Ltd and Nepal Lube Oil Ltd, similarly, jumped 5% each. Ankhu Khola Jalvidhyut Company Ltd, Kamana Sewa Bikas Bank Ltd and Grameen Bikas Laghubitta Bittiya Sanstha Ltd were the other major advances.

In contrast, Support Laghubitta Bittiya Sanstha Ltd and Nirdhan Utthan Laghubitta Bittiya Sanstha Ltd’s shares struggled with both closing almost 6% lower. Mountain Energy Nepal Ltd, Gurans Laghubitta Bittiya Sanstha Ltd and Nerude Laghubitta Bittiya Sanstha Ltd fell 5.19%, 4.95% and 4.78%, respectively. Chhyangdi Hydropower Ltd, Global IME Laghubitta Bittiya Sanstha Ltd and Sadhana Laghubitta Bittiya Sanstha Ltd’s shares also suffered major losses.

The equity market, as per the ARKS technical analysis, formed a bearish candlestick on the daily timeframe pointing towards possibility of some correction. Technical indicators also reflect slight loss of momentum as the buying pressure has eased somewhat after a sustained rally. A minor support lies at 2,500, a breach of which can see the index test 2,380 level.  However, with the overall index making higher tops and higher bottoms, further extension of the short term uptrend is likely. 

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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