Daily Market Commentary

Stocks cap off week with a modest decline

Published On: June 24, 2021 06:50 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, June 24: Despite a higher opening, the Nepalese stock market’s benchmark fell steeply in the first few minutes of trading. Stocks saw choppy trading thereafter and showed a lack of direction but traded mainly in negative territory. A surge in the afternoon pushed the index around 15 points higher but the advance was short-lived with the index pulling back in the closing hour. Nepse finished Thursday’s trading 16.96 points lower at 2,843.

Though Tuesday’s advance offered some respite to the investors after a relentless 190-point plunge, selling pressure in the latter half of the week erased all of the session’s gains. Enthusiasm among investors have taken a serious hit after Sebon’s cautionary remarks. Consequently, volumes have gradually dried with each session registering a decline in daily turnover. Total transaction fell below Rs. 8 billion mark for the first time since mid-May.

Only the Hydropower and Hotels & Tourism sector ended the day in positive territory. The respective indices closed more than 1% higher. On the other hand, Development Bank, Investment, ‘Others’, Finance and Non-Life Insurance sectors dipped more than 1%. Besides all other sectors witnessed marginal declines contributing to the broader market’s lackluster close.

Shares of Nepal Reinsurance Company Ltd and Nepal Insurance Company Ltd were traded the most. While the former saw a transaction of Rs. 378 million, the latter posted a total turnover of Rs. 353 million. Upper Tamakoshi Hydropower Ltd, National Hydropower Company Ltd, and Hydroelectricity Investment & Development Company Ltd were the other actively traded stocks of the day.

Shares of Upper Tamakoshi Hydropower Ltd bucked the trend as the biggest hydropower company by planned capacity shot up by 10%. Samriddhi Finance Company Ltd also saw the strength and rose 3.65%. Ru Ru Jalbidhyut Pariyojana Ltd, Agriculture Development Bank Ltd, Nepal Hydro Developers Ltd, and Ridi Hydropower Development Company Ltd posted advances of more than 2%.

On the other hand, Ngadi Group Power Ltd saw the biggest percentage decline of the day. The energy scrip plunged 5.68%. Nepal Insurance Company Ltd closely followed with a 5.08% dip. Barun Hydropower Co. Ltd and NRN Infrastructure and Development Ltd closed over 4% lower. Karnali Development Bank Ltd, Everest Bank Ltd, CEDB Hydropower Development Company Ltd, and Multipurpose Finance Ltd’s shares also came under pressure and declined over 3% each.

As per the ARKS technical analysis, the market formed a small bearish candlestick suggesting slight selling pressure in Thursday’s session. A failed rebound attempt followed by two consecutive days of decline indicate sellers dominating in the short run. On a positive note, the index now rests close to the support zone around 2,840 marks, where a volume backed rebound can see the index make a rebound to the upside. Whereas, a break below the crucial level might point towards a deeper correction with the next support resting at around 2,750.

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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