Daily Commentary: Nepse corrects slightly, while turnover remains moderate

Published On: July 28, 2020 08:21 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 27: After opening slightly higher and climbing over 10 points in the morning session, the Nepal Stock Exchange (Nepse) benchmark index retreated in the session after the mid-day. Thereafter, the index managed to trade in green throughout the session, but witnessed a modest dip towards the close. At Monday’s close, the index edged 2.62 points lower to end at 1,462.48 points.

Following two straight winning sessions, the index saw a minimal correction on Monday. Hence, some indecision was witnessed as both buyer and sellers negated each other’s pressure. Meanwhile, investors are still waiting for fourth quarterly financial announcements by listed companies which will provide a more concrete basis for decision making in the secondary market. Nonetheless, market participation remained upbeat as over Rs 1.81 billion worth of shares changed hands in the session.

Only a few sub-indices managed to close the day higher. ‘Others’ sector saw strength and closed 0.71 percent higher. Similarly, Microfinance, Development Bank and Manufacturing & Processing segments saw modest gains. Non-Life Insurance stocks suffered as the group’s sub-index fell 2.18 percent. Similarly, Hotels and Life Insurance sub-indices dropped 1.97 percent and 1 percent. Besides, all other sectors closed the day slightly lower.

Shares of Nepal Life Insurance Company Ltd were traded the most as the scrip witnessed a total turnover of Rs 174 million. Nepal Reinsurance Company Ltd, similarly, saw transactions worth over Rs 149 million. Nabil Bank Ltd, NIC Asia Laghubitta Bittiya Sanstha Ltd and NIC Asia Bank Ltd registered turnovers of Rs 90 million, Rs 77 million and Rs 60 million.

Joshi Hydropower Development Company Ltd extended its recovery from it’s all time low with a 10 percent rally. NIC Asia Laghubitta Bittiya Sanstha Ltd and Shree Ram Sugar Mills Ltd also saw considerable buying pressure and closed the day around 5 percent higher. Mirmire Laghubitta Bittiya Sanstha Ltd, Best Finance Company Ltd and Pokhara Finance Ltd went up by over 4 percent each.

On the other hand, the biggest loss came from shares of Corporate Development Bank Ltd with its price tumbling 9.52 percent. Oriental Hotels Ltd sank 6.81 percent on profit booking by short term traders. Other major decliners include Gurkhas Finance Ltd, Ghalemdi Hydro Ltd, Panchthar Power Company Ltd and Siddhartha Insurance Ltd which posted losses of over 5 percent apiece.

ARKS technical analysis indicates the equity index consolidating on Monday. The small spinning top candlestick reflects uncertainty with further range bound movement likely. Technical indicators also show that the rally has slightly lost its momentum despite the market maintaining a positive bias. Previous low of 1,417 points can provide support to the equity market. Whereas resistance lies at around 1,500 points level.

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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