Daily Market Commentary

Nepse stretch gains as volumes improve

Published On: June 8, 2021 07:52 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, June 8: Stocks opened session in green and plateaued for the first half an hour of Tuesday’s trading session. Nonetheless, with finance and development bank stocks stretching upward movement further, the Nepse index climbed as high as 2,960 around mid-day. After a brief consolidation in late afternoon, the index closed the day at its intra-day high of 2,960.14 – up 53.44 points against the session earlier. 

Following a small consolidation in the day earlier, stocks continued its move upward. The market has continued to see upbeat movement with the recent move attributable mainly to the influx of fresh funds as more investors are entering the secondary market amidst the prohibitory orders. Turnover also rose with market participation at almost Rs. 17 billion on Tuesday. 

Development Bank and Finance segments continued to lead the market’s movement as both sectors ended north of 8%. Non-Life Insurance and Life Insurance sectors also saw strength and jumped more than 3% each. Mutual Fund, Manufacturing & Processing and Hydropower sub-indices rose more than 2%. Heavyweight banks ended the day 1% higher. All other sectors ended the day in green, except, Investment, Hotels & Tourism and Microfinance sectors which ended marginally lower.

Nepal Reinsurance Company Ltd led the top turnover stocks’ list for another day. Over Rs. 1 billion worth of the equity changed hands. Rasuwagadhi Hydropower Ltd, United Modi Hydropower Ltd and Lumbini Bikas Bank Ltd’s shares were also heavily traded with corresponding turnovers of Rs. 478 million, Rs. 374 million and Rs. 358 million. Nepal Infrastructure Bank Ltd, Garima Bikas Bank Ltd, Nepal Credit and Commerce Bank Ltd and Muktinath Bikas Bank Ltd were the other major active scrips. 

Over 30 stocks remained locked in the positive circuit of 10%. Dominating the list were Finance, Development Bank and Insurance stocks. Himalayan General Insurance Ltd, Gurkhas Finance Ltd, Shree Investment and Finance Co. Ltd, Janaki Finance Ltd, Shangrila Development Bank Ltd and Muktinath Bikas Bank Ltd were among the leading stocks. 

On the other hand, Mero Microfinance Bittiya Sanstha Ltd and Himal Dolakha Hydropower Development Company Ltd suffered the most. Both scrip fell over 2.8% each. Samudayik Laghubitta Bittiya Sanstha Ltd and Mithila Laghubitta Bittiya Sanstha Ltd, subsequently, fell over 2% each. Civil Laghubitta Bittiya Sanstha Ltd, Nirdhan Utthan Laghubitta Bittiya Sanstha Ltd and Nepal Infrastructure Bank Ltd were among other major decliners.

As per the ARKS technical analysis, the equity market formed a strong bullish candlestick on the back of heavy volumes on the day. With technical indicators also reflecting strength the index will likely stretch the upside move further, even though some sectors may see correction amidst profit taking. Besides, given the market stays above the psychological 2,900 level, the overall uptrend will remain intact. 

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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