Weekly Market Commentary

Nepse ends in red for second straight week

Published On: March 5, 2021 08:00 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, March 5: The local benchmark came under notable pressure at the beginning of the week with the Nepal Stock Exchange (Nepse) shedding almost 70 points on Sunday. Nonetheless, the market managed to recover some prior day losses with a gain of 40.64 points.  However, the index fell 59 points and 39 points on Tuesday and Wednesday. On Thursday, the bourse saw a massive rebound with a gain of 90 points on the last trading of the week. Eventually, Nepse ended the week with a 47.46 point or 1.86% loss at 2506.68.

The local bourse saw some correction in this week which was mainly driven by the current political instability along with profit booking. Despite some selling pressure on mid-week, the local bourse firmly held footing above the 2,500 marks towards the last trading day of the week. Weekly turnover stood at Rs.32 billion.

Most of the sectors ended in red while the trading and hotels and tourism sub-index rallied above 31.49% and 8.96% respectively. Meanwhile, Life-Insurance, Mutual fund, Others and Manufacturing & Processing sectors was major dips. Their group’s sub-index decline above 3% each. Likewise, sub-indices of Banking and Development Bank fell 2% piece while Investment and Non-life insurance sub-index lost 1% each. Finance, Hydropower, and Microfinance sectors ended in red with a meager decrement.

In terms of active stocks of the week, Nepal Infrastructure Bank Ltd and Shikhar Insurance Co. Ltd’s shares were traded the most. Over Rs. 2.087 billion and 2.026 billion worth of their shares were traded. Nepal Life Insurance Co. Ltd and Global IME Bank Ltd recorded the total transaction over Rs. 1 billion each. NIC Asia Bank Ltd, Nepal Bank Ltd, Nabil Bank Ltd, Asian Life Insurance Company Ltd, and Nepal Reinsurance Company Ltd posted turnovers of Rs. 976 million, Rs.942 million, Rs. 926 million, Rs. 918 million and 915 million respectively.

Among announcements, Everest Insurance Company Ltd has announced 8.42% bonus shares to its shareholders for the fiscal year 2076/77. The company is yet to get approval from Beema Samiti and their upcoming Annual General Meeting (AGM). Likewise, Reliance Finance Ltd has also proposed 10% bonus shares to its shareholders.

On the technical front, the index formed a hammer candlestick suggesting potential reversal to the upside. Likewise, Technical indicators like Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) point towards the gain of momentum. Similarly, the index succeeded to close above the 2500 psychological mark along with a 5-day moving Average line which suggests the uptrend is still intact in the current context. However, a failure to sustain above the 2500 mark will possibly lead to further downward movement.

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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