Daily Commentary: Nepse edges lower snapping 5-day winning run

Published On: September 16, 2020 08:33 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Sept 16: The benchmark Nepal Stock Exchange (Nepse) index hovered slightly in green in the opening hours after Tuesday’s trading session. However, extended profit booking pulled the index sharply lower in the afternoon where the index fell as much as 10 points. The index found some footing in the latter hours recouping some of the earlier losses but closed in the red nonetheless. Nepse fell 4.47 points at the session’s close to end at 1,536.04 points.

Tuesdays decline came after back-to-back gains in the previous 5 trading days. Some correction was witnessed in the session amid profit booking by traders. With the drop in the index’s worth, turnover also remained relatively restrained with Rs. 1.8 billion worth of shares traded against Rs. 3.2 billion in the previous session.

Most of the sectors fell in the day while only a few sub-groups managed to eke out gains. Hotels, Mutual Fund and Life Insurance sub-indices finished slightly higher. On the other hand, Trading sub-index suffered the biggest decline and dropped 1.37%. Development Bank and ‘Others’ sub-index dipped 0.82% and 0.73%. Hydropower segment also retraced 0.71%. Besides, all other sectors saw minimal losses.

Shares of Nepal Reinsurance Company Ltd continued to lead the list of actives. Over Rs. 112 million worth of shares were traded on the day. Kumari Bank Ltd and Neco Insurance Company Ltd followed suit with turnovers of more than Rs. 65 million each. Nepal Life Insurance Company Ltd’s shares registered turnover of Rs. 64 million. Nepal Bank Ltd, Shikhar Insurance Company Ltd and Surya Life Insurance Company Ltd were among other actively traded shares.

Dibyashwori Hydropower Ltd posted the best performance of the day as its share price jumped exactly 10%. NRN Laghubitta Bittiya Sanstha Ltd and Reliance Life Insurance Ltd stretched their respective rallies and shot up by almost 10%. Energy stocks saw strength with Khani Khola Hydropower Company Ltd, Ghalemdi Hydro Ltd, Union Hydropower Ltd and Ankhu Khola Jalvidhyut Company Ltd posting gains of around 9% apiece.

On the other hand, few hydropower stocks corrected notably. Mountain Hydro Nepal Ltd and Radhi Bidyut Company Ltd posted losses of over 4% each. Gurkhas Finance Ltd, Hydroelectricity Investment and Development Company Ltd and 10.25% NIC Asia Debenture 2083/84 fell around 3.8% each. Asha Laghubitta Bittiya Sanstha Ltd, United Modi Hydropower Ltd and Panchakanya Mai Hydropower Ltd were the other major losing scrips.

With the index losing momentum around the 1,550 points mark, some retracement was visible on Tuesday with the formation of a small bearish candlestick. Hence, the losses can be taken as a minor correction with notable downward pressure yet to be seen. As per ARKS technical analysis, the relative strength index (RSI) has also dipped downwards from the overbought zone indicating some further retracements likely. Nonetheless, the overall trend in the market has maintained a positive bias, where rebounds with substantial turnover can give opportunities to take buying positions.

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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