Weekly Market Commentary

Nepse snaps 10-week gaining streak

Published On: February 26, 2021 06:32 PM NPT

KATHMANDU, Feb 26: The Nepal Stock Exchange (Nepse) index opened the week with a modest gain. The benchmark climbed 3.67 points on Sunday. Thereafter, the equity market witnessed notable dip with the index sinking 32.68 points on Monday followed by a 21.16 point’s decline on Tuesday.

While the index found some footing on Wednesday after reinstatement of the parliament with a 12.57 point’s gain, further selling pressure on Thursday dragged the index 44.94 points lower. Eventually, the index ended the review period 82.54 points or 3.13% lower at 2,554.14.

The local bourse saw weekly correction for the first time since the beginning of 2021. Profit booking in majority of the sectors as well as political scenario mainly played a role in driving the market lower. More cautious trading can be expected this week. Turnover also fell slightly on week-to-week basis. Weekly turnover stood at Rs. 38 billion.

Sensitive Index also dipped following selling pressure in Class ‘A’ stocks. The benchmark fell 4.15%. Only Mutual Fund and Hydropower indices ended the week in green. The respective sectors added 5.8% and 3.4%. On the other hand, Banking and Life Insurance stocks suffered and fell around 4.6% on average. Finance and Development sub-indices followed suit with declines of 3.71% and 3.46%. Trading and Microfinance sub-indices fell over 3% each. All other segments closed the week firmly lower.

Nepal Infrastructure Bank Ltd’s shares were heavily traded on its second week of trading. Amidst a highly volatile trading, the scrip saw a turnover of over Rs. 3 billion. Nepal Bank Ltd and NIC Asia Bank Ltd, subsequently, registered turnovers of Rs. 1.9 billion and Rs. 1.4 billion. Global IME Bank Ltd, Nabil Bank Ltd, Nepal Life Insurance Company Ltd and Neco Insurance Company Ltd were among other top turnover stocks.

Over 173 million unit shares were listed in the week including bonus shares of Agriculture Development Bank Ltd, Mega Bank Ltd, Standard Chartered Bank Ltd and Everest Bank Ltd. The other listings include IPO shares, bonus shares, right shares, mutual fund units and debentures of 11 companies.

On the technical front, the index formed a strong bearish candlestick reflecting sellers dominance in this week’s trading. The candlestick also marks the index’s first correction in weeks. Momentum indicators point towards loss of momentum making correction or consolidation likely in the present context. Nonetheless, the overall medium term uptrend has remained intact pointing towards possibility of further gains over the longer run.

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 thispublication)

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