Weekly Market Commentary

Nepse ends week 100 points higher, weekly turnover hits record

Published On: May 22, 2021 08:58 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, May 22: A rally of more than 54.29 points on Sunday helped Nepse index break its all-time high hit at mid-April. With the bourse seeing massive buyer enthusiasm, strength carried over to the latter part of the week. On Monday, the benchmark jumped 20.92 points followed by another surge of 34.59 points in Tuesday’s session. The benchmark corrected 13 points on Wednesday, the index’s first loss in 8 sessions. The last trading day of the week witnessed a modest 6.38 point’s gain. Consequently, the exchange’s gain tally for the week stood at 103.18 points or 3.84% with the benchmark ending at 2,787.19.

This week’s trading was marked by substantial volumes with average daily turnover crossing Rs. 10 billion for the first time. The buying pressure intensified following Nepse’s fresh record above 2,735 on Sunday. With more investors going long in all of the sectors in the latter part of the week, the index now rests just shy of 2,800 mark. Though some correction in few sectors was observed, investors interest in buying other segment scrips helped index hold ground preventing a major pullback. A weekly turnover of Rs. 52 billion was recorded in Nepalese stock market.

Sensitive Index outperformed the broader market marginally with BFIs leading the advance. The average shot up by 4.06%. In terms of sectoral performance, only Manufacturing & Processing sub-index ended the week in red with a 1.73% drop. Finance sub-group saw major strength as the sub-index rallied 14.88%. Development Bank and Hotels & Tourism indices followed with gains of 9.43% and 6.59%. ‘Others’, Trading and Life Insurance sector closed over 4% higher. Heavyweight Banks also climbed 3.73% in the review period. All other sectors closed the week firmly higher.

Nepal Reinsurance Company Ltd was the most actively traded stock of the week with the reinsurer leading the list of  top turnover stocks in each of the five trading days. Over Rs. 3 billon worth of the security changed hands. Other heavily traded stock of the week were National Life Insurance Company Ltd, Arun Kabeli Power Ltd and Nepal Infrastructure Bank Ltd with turnovers of over Rs. 1 billion apiece. National Hydropower Company Ltd, IME General Insurance Ltd and Hydroelectricity Investment and Development Company Ltd followed suit. 

The benchmark index formed a strong bullish weekly candlestick indicating strong buying pressure in the week. With turnover almost doubling compared to the week earlier along with a breach of the previous high, the market remains notably in control of bulls. Both weekly Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) reflect that the immediate trend remains bullish. Besides, the index has continued to make higher tops and higher bottoms, which also validate the current uptrend.

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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