Daily Market Commentary

Nepse ends marginally higher erasing some of previous day losses

Published On: February 10, 2021 06:58 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Feb 10: The benchmark index opened Wednesday’s session higher, but a sharp correction dragged Nepse more than 20 points lower in the morning. A recovery followed suit where the index recouped all of its morning losses. The index, thereafter, traded flat along the opening level for most of the afternoon finally ending the day with a modest gain. Nepse ended trading at 2,543.03 – up 8.66 points against the session earlier.

While the bourse saw a notable correction on the back of profit booking seen on microfinance and non-life insurance segments on Tuesday, investors showed notable buying enthusiasm on Wednesday. Banking and finance stocks helped the index hold ground despite losses seen in other sectors. Turnover, nonetheless, dropped slightly against Tuesday. Total market activity was recorded as Rs. 7.65 billion.

Sectors ended the day mixed. Finance sub-index rallied 3.27%, while Hotels segment ended with 2.14% gain. Heavyweight banks also rose 1.5%. Non-Life Insurance and Development Bank sectors also ended the day in green. On the other hand, Trading scrips suffered as the sectors average fell 3.21%. Manufacturing & Processing, Microfinance and Hydropower sub-indices also fell around 1%. Life Insurance, ‘Others’ and Mutual Fund sub-groups saw minor losses.

Shares of Global IME Bank Ltd were traded the most. Over Rs. 520 million worth of the bank’s shares changed hands. Prabhu Bank Ltd and Kumari Bank Ltd were the other active stocks with turnovers of Rs. 461 million and RS. 371million. Shikhar Insurance Company Ltd, Nepal Credit and Commerce Bank Ltd and Deprosc Laghubitta Bittiya Sanstha Ltd were the other heavily traded scrips.

Finance stocks led the gains. Gurkhas Finance Ltd, Guheshwori Merchant Banking & Finance Ltd and ICFC Finance Ltd remained locked in the upper circuit limit of positive 10%. Reliance Finance Ltd, Kumari Bank Ltd and Global IME Bank Ltd saw gains of around 6% each. Oriental Hotels Ltd, Himal Power Partner Ltd and IME General Insurance Ltd were among other top advances.

Shares of Sadhana Laghubitta Bittiya Sanstha Ltd came under pressure and dropped 6.38%. Everest Insurance Company Ltd Promoter Share also traded 4.22% lower. Support Laghubitta Bittiya Sanstha Ltd and Salt Trading Corporation tanked 3.85% and 3.49%, respectively. Bottlers Nepal Terai Ltd, Unnati Sahakarya Laghubitta Bittiya Sanstha Ltd, Mountain Hydro Nepal Ltd and Liberty Energy Company Ltd fell around 3% each.

As per the ARKS technical analysis, the index formed a small doji candlestick reflecting uncertainty in the equity market. While some traders resorted to profit booking, some took it as an opportunity to go long. Hence, buying and selling pressure negated each other in the session. On a positive note, the index has continued to hover above 2,500 mark. Hence, further consolidation along the aforementioned level can provide a platform for the index to make another stride upwards. However, a close below 2,500 line can see the index correct further towards 2,400 level.

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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