Daily Market Commentary

Nepse dips slightly as stocks recoup intra-day losses

Published On: June 18, 2021 05:20 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, June 18: The benchmark index witnessed a highly volatile session on the last trading day of the week. After plunging around 25 points early in the morning, the Nepal Stock Exchange (Nepse) index witnessed a sharp recovery towards positive territory. Thereafter, the benchmark gyrated between gains and losses in the latter trading hours. At the close on Thursday, the benchmark ended little changed with a decline of 1.30 points at 2,968.42.

Stocks continued to suffer after Sebon’s press release listing out 51 risky scrips as per the analysis done by the regulator. However, the selling pressure eased off slightly as some buying pressure was witnessed in the stocks that tanked notably following Sebon’s cautionary statements. Meanwhile, volumes have remained modest suggesting lack of conviction. On day-to-day basis, total turnover fell by around 30% to Rs. 10.90 billion. 

In terms of traded sectors, Development Banks and Finance sectors made recovery as the respective sectors rebounded 2.01% and 1.43%. ‘Others’ sub-index also jumped by over 1%. Hotels & Tourism, Non-Life Insurance, Trading and Life Insurance sectors managed to end in green. On the other hand, Microfinance sector fell 1.21% followed by Banking sub-group which lost 0.53%. Mutual Fund, Manufacturing & Processing, Investment and Hydropower sub-indices also inched lower. 

Shares of Nepal Reinsurance Company Ltd were traded the most with a turnover of over Rs. 773 million. National Hydropower Company Ltd and Nepal Insurance Company Ltd followed suit registering transactions of Rs. 300 million and Rs. 274 million, respectively. Nepal Infrastructure Bank Ltd, Himalayan Distillery Ltd and NLG Insurance Ltd were among other heavily traded srips. 

Shares of Khani hola Hydropower Co. Ltd was the best performer rallying over 7.42% in the session. Nepal Finance Ltd, Karnali Development Bank Ltd, Soaltee Hotel Ltd and Green Development Bank Ltd’s shares also saw strength and shot up by more than 5% apiece. Saptakoshi Development Bank Ltd, NLG Insurance Ltd and Pokhara Finance Ltd closed over 3% higher. 

CEDB Hydropower Development Company Ltd corrected 6.55% ending its 6-day winning run. Chhyangdi Hydropower Ltd, Ngadi Hydropower Ltd and Mountain Energy Nepal Ltd also struggled and slumped more than 3%. Himal Power Partner Ltd fell 2.61%, Gurkhas Finance Ltd dropped 2.56% and First Microfinance Development Bank Ltd ended 2.17% lower. 

As per the ARKS technical analysis, the equity index formed a small bearish candlestick with wicks on either side, suggesting volatility and indecision in the current juncture. The index made moves of more than 20 points towards either side suggesting lack of conviction among investors. The same is also reflected by the traded volumes as the daily volume fell sharply against the prior four sessions of the week. A breach of 2,950 support can signal extension of correction further, while a rebound with volume can see the index make moves to the upside with resistance lying at 3,025.  

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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