Weekly Market Commentary

Market ends week flat with Nepse yet to close above key 3,200 level

Published On: August 20, 2021 06:54 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, August 20: The equity index fell on Sunday following the unveiling of monetary policy by Nepal Rastra Bank. The Nepal Stock Exchange (Nepse) index fell 24.57 points to begin week but found footing thereafter. The index added 5.75 points on Monday, followed by a gain of 0.23 points on Tuesday. A broad rally pushed the index 38.71 points higher on Wednesday before Thursday’s correction of 18.17 points erased most of Nepse’s weekly gain. Eventually, Nepse ended week with a gain of 1.88 points or 0.06% at 3,180.79.

Despite weekend selling pressure, the market managed to close in green extending its winning streak for a sixth straight week. Weekly turnover stood at an all-time high level of almost Rs. 100 billion. Rs. 97 billion worth of securities were traded in the week despite monetary policy bringing in some correction in the market.

Nepse ended little changed as sectors turned in mixed performance. While Manufacturing & Processing and Development Bank sectors jumped 9.06% and 6.62%, Microfinance and Finance sub-indices rose 3.85% and 3.72%. Non-Life Insurance, Investment and Life Insurance sectors inched marginally higher. On the other hand, Hotels & Tourism segment was hit the most as the sub-index dropped 4.16%. Mutual Fund, Banking and Hydropower stocks, subsequently, dipped 3.72%, 2.04% and 1.65%. ‘Others’ and Trading indices ended marginally in red.

Shares of National Hydropower Company Ltd were traded the most followed by Api Power Company Ltd. Both energy stocks saw turnovers of over Rs. 3 billion apiece. Arun Valley Hydropower Development Company Ltd and Nepal Bank Ltd followed suit with turnovers of Rs. 2.9 billion and Rs. 2.8 billion. Arun Kabeli Power Ltd, Ridi Hydropower Development Company Ltd and Kamana Sewa Bikas Bank Ltd were among other actively traded scrips.

On the technical front, the equity index formed a small doji candlestick on the weekly timeframe reflecting slight indecision. The market also remained highly volatile this week reaching as low as 3,104 to 3,227 on the higher side. Nonetheless, volumes remained upbeat making a sharp correction unlikely. Weekly technical indicators also reflect medium term uptrend. However, a consolidation in the current range is also likely. A breakout above 3,200 can signal further bullish movement. 

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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