Daily Market Commentary

Nepse extends winning run; turnover makes another record

Published On: June 14, 2021 06:40 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, June 14: The local stock market began Sunday’s session on an upbeat note with the Nepse index climbing more than 30 points higher in the first few minutes of trading. Even though Nepse traded in green throughout the trading hours, stocks witnessed high volatility in the early hours. Following a consolidation in the afternoon at around 2,970 mark, the index registered further gains towards the close. The benchmark ended the day 38.32 points higher at 2,983.11.

The movement seen in some of the sectors is yet to lose steam as the index continued to make fresh records. With the index at a new high, market participation also jumped sharply. A record Rs. 19.5 billion worth of shares changed hands on Sunday. 

Development Bank and Finance sectors continued to see upbeat movement. The respective sub-indices shot up by 8.24% and 7.14%. Hydropower and Hotels & Tourism sub-indices followed suit with gains of 6.10% and 4.73%. Investment index rose 2.38%, while Manufacturing & Processing and Banking sector ended slightly higher. On the other hand, Trading sub-index dipped 1%. Life Insurance and ‘Others’ sectors also came under slight pressure closing 0.79% and 0.38%. Microfinance, Mutual Fund and Non-Life Insurance sub-indices ended marginally in red. 

Shares of Arun Valley Hydropower Development Company Ltd were traded the most as over Rs. 722 million worth of the equities changed hands. Lumbini Bikas Bank Ltd, National Hydropower Company Ltd and Nepal Reinsurance Company Ltd followed suit with turnovers of Rs. 584 million, Rs. 544 million and Rs. 538 million. Jyoti Bikas Bank Ltd, Arun Kabeli Power Ltd and Rasuwagadhi Hydropower Ltd were the other active stocks of the day. 

The list of major winners was dominated by finance, development bank and hydropower names. Shree Investment Finance Co. Ltd, Samriddhi Finance Company Ltd, ICFC Finance Ltd Karnali Development Bank Ltd, Sindhu Bikas Bank Ltd and Reliance Finance Ltd were among the best performing stocks on Sunday. 

Meanwhile, Nepal Insurance Company Ltd registered biggest daily loss as the scrip tanked 4.15%. United Idi Mardi RB Hydropower Ltd and Sadhana Laghubitta Bittiya Sanstha Ltd’s shares also struggled closing around 2.8% lower apiece. Narayani Development Bank Ltd, Summit Laghubitta Bittiya Sanstha Ltd, Mirmire Laghubitta Bittiya Sanstha Ltd and Global IME Laghubitta Bittiya Sanstha Ltd registered declines of more than 2%. 

As per the ARKS technical analysis, the index formed a bullish candlestick following consolidation around 2,950 in the past three sessions. With volumes at record level, the momentum favors bulls in the present context. Both Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) indicators also point towards possibility of further upside move. However, caution must be taken before taking positions on highly volatile sectors. 

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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