Weekly Market Commentary

Nepse closes week slightly higher

Published On: August 6, 2021 07:51 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, August 6: The Nepal Stock Exchange (Nepse) index saw upbeat movement since the beginning of the week. While Sunday and Monday saw gains of only 1.25 points and 4 points, buying pressure was seen at mid-week. The benchmark rose 26.02 points on Tuesday followed by a gain of 12.06 points on Wednesday. The final day of the week saw a modest correction as Nepse ended Thursday’s session 12.34 points in red. Overall, the index added more than 27 points or 0.90% in the week-on-review settling just above the 3,100 mark at 3,107.45.

With market stretching its July rally, positive sentiment carried over to the beginning of the week. Consequently, Nepse ended in green for a fourth straight week. Volume has also remained upbeat so far with almost Rs. 13 billion worth of shares changing hands every session. With investors still waiting for the monetary policy before taking any notable buying positions, movements have remained relatively subdued of late resulting in a consolidation around 3,100.

Besides, with upbeat financial reports coming in from microfinance companies throughout the week, the market continued to hold its footing despite a rally of over 200 points in a month. Meanwhile, bellwether banks are yet to report their financial performance, which will likely play a key role in determining the index’s movement in the month of August.

Sensitive Index outperformed the broader market slightly reflecting strength among Class ‘A’ stocks. The gauge rose 1.42%. Gains came mainly from Hydropower sector with the group’s average shooting up by 7.66%. Microfinance and Development Bank sector followed suit with gains of 4.51% and 2.66%. Investment Index rose 2.30%, while Manufacturing & Processing, Trading, Finance and Banking sectors inched marginally higher. On the other hand, Hotels & Tourism sub-index dipped 4%. ‘Others’, Mutual Fund and Non-Life Insurance sub-indices lost over 2% each. Life Insurance stocks dipped 1.32% on average.

On the listing front, the exchange listed bonus shares of Nadep Laghubitta Bittiya Sanstha Ltd, Prudential Insurance Company Ltd, Mithila Laghubitta Bittiya Sanstha Ltd, Forward Microfinance Laghubitta Bittiya Sanstha Ltd and Reliance Finance Ltd.

On the technical front the, index formed a small spinning top candlestick on the weekly timeframe with long upper wick. While, the spinning top figure reflects indecision, the long upper wick indicates sellers gaining control towards the end of the review period. Moving Average Convergence/ Divergence (MACD) and Relative Strength Index (RSI) reflects slight loss of momentum, making a minor correction likely. However, given the market holds ground above 3,100 level, the index will likely stretch its upward move further.

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 thispublication)

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