Daily Market Commentary

Stocks stage recovery, Nepse back above 2,900 mark

Published On: June 22, 2021 09:01 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, June 22: Local stocks traded in green in the morning before regressing towards negative territory briefly. Nepse went as low as 2,825 before buyers gained control of the market. By mid-day, the benchmark was up by more than 15 points. The index continued to see steady advance throughout the latter part of the trading session. By Tuesday’s close, Nepse staged a massive rebound to end the day with a gain of 79.43 points at 2,913.84. 

Following five consecutive sessions of decline where the Nepse slid by almost 200 points, stocks registered a massive comeback. The gains came on the back of investors taking long positions on stocks that suffered heavily after Sebon’s cautionary statements in the week earlier. However, volumes have remained relatively low. Rs. 10.29 billion worth of equities changed hands on the day. 

All sectors ended the day firmly higher with biggest gains coming from Finance, Development Bank and Hydropower segments. Sub-indices of each shot up by over 5%. Investment Index followed with a rally of over 4%. Hotels & Tourism sector jumped 3.13%. All other segments ended the day firmly higher. 

Shares of Nepal Reinsurance Company Ltd were traded the most with a turnover of almost Rs. 1.5 billion. The reinsurer announced 20% dividend for the year 19/20 including 16.5% bonus shares and 3.5% cash payout. Hydroelectricity Investment & Development Company Ltd, next, registered a turnover of Rs. 323 million. National Hydropower Company Ltd and Nepal Infrastructure Bank Ltd posted turnovers of Rs. 263 million and Rs. 207 million. Lumbini Bikas Bank Ltd, Nepal Insurance Company Ltd and Jyoti Bikas Bank Ltd were among other heavily traded shares. 

Api Power Company Ltd, Ngadi Group Power Ltd, Panchakanya Mai Hydropower Ltd, Barun Hydropower Co. Ltd, Hydroelectricity Investment and Development Company Ltd and Janaki Finance Ltd remained locked in the upper circuit level of 10%. Besides, mainly energy scrips saw considerable strength. 

On the other hand, Gurkhas Finance Ltd tumbled 3.17% followed by Ru Ru Jalbidhyut Company Ltd, which ended marginally lower. Aarambha Chautari Laghubitta Bittiya Sanstha Ltd, Nerude Laghubitta Bittiya Sanstha Ltd, Suryodaya Laghubitta Bittiya Sanstha Ltd and Sabaiko Laghubita Bittiya Sanstha Ltd saw modest declines.

On the technical front, the index formed a strong bullish candlestick with a sharp rebound on Tuesday. Though technical indicators still indicate bears controlling the recent sessions, the day’s gain suggest loss of selling momentum. A follow up green candle with increase in volumes will validate the short-term uptrend. Whereas, the index will likely retest 2,835 support in case of further correction. 

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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