Daily market commentary

Nepse stretches sideways movement with modest gain

Published On: December 31, 2019 07:36 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Dec 31: The Nepal Stock Exchange (Nepse) index traded flat in early trading on Monday. However, a steady advance after mid-session saw the index recoup its previous day's losses. The benchmark index eventually ended the session 5.53 points higher at 1,167.95 points.

Following a drop in the previous session, buyers remained relatively active pushing the index toward the 1,170-point mark. With the gain, the index has extended range-bound trading suggesting lack of conviction in the secondary market. On a positive note, the index has held ground around 1,170 points maintaining its December's gain. The rise in the index was also accompanied by an improvement in daily turnover. Total transaction jumped to over Rs 622 million from Rs 422 million recorded on Sunday.

Most of the sectors closed the day higher. Life Insurance sub-index shot up by 4.47% as shares of Nepal Life Insurance Company Ltd experienced considerable buying pressure. Manufacturing & Processing and Trading sub-indices also jumped over 2% as share prices of Shivam Cements Ltd and Salt Trading Corporation rallied. Mutual Fund and Non-Life Insurance sub-indices also rose over 1% each. 'Others', Hotels and Microfinance segments also edged higher. On the other hand, Hydropower stocks suffered. The energy sector's sub-index was down by 0.55%. Sub-indices of Finance, Banking and Development Bank groups also inched lower.

Nepal Life Insurance Company Ltd led the list of active stocks with turnover of Rs 100 million. Next, Shivam Cements Ltd registered turnover of Rs 50 million, while Rs 48 million worth of units of 10.50% SBL Debenture 2082 also changed hands on the day. NMB Bank Ltd, Salt Trading Corporation and Himalayan Distillery Ltd were among other active stocks of the day.

Among advances, share price of Shivam Cements Ltd rallied 5.67%. Swadeshi Laghubitta Bittiya Sanstha Ltd, Asian Life Insurance Company Ltd and Life Insurance Co Nepal closely followed, gaining 5% each. Share prices of Himalayan Distillery Ltd, Nepal Life Insurance Co. Ltd and Infinity Laghubitta Bittiya Sanstha also closed 4% higher.

Conversely, Mountain Hydro Nepal Ltd registered the worst performance of the day. The energy stock fell 5.55%. Joshi Hydropower Development Company Ltd also saw its share price tank 4.76%. Nepal Seva Laghubitta Bittiya Sanstha Ltd, meanwhile, shed 3.61% off its share price. Sindhu Bikash Bank Ltd, Gurkhas Finance Ltd and Prudential Insurance Company Ltd were the other major decliners shedding more than 2% each.

On technical front, Nepse formed a bullish candlestick erasing previous session's losses and stretching range-bound movement. Technical indicators, meanwhile, suggest neutral to slightly bullish sentiment prevailing in the market. Nonetheless, for a momentous rally to follow, a breakout of 1,180 points mark is crucial. Meanwhile, support for the benchmark index is at 1,150 points level.

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