KATHMANDU, Dec 21: The equity market opened with major weakness as the Nepal Stock Exchange (Nepse) index fell more than 60 points in the first few minutes of trading. A sharp recovery pushed the index in green at mid-day but another slump followed suit. Following a volatile afternoon trading, stocks witnessed a steady advance in the final hours with the benchmark closing with a 30.33 points’ gain at 1,965.96 points.

Following Sunday’s rout fueled by parliament dissolution, the equity market recouped its previous day losses as panic selling subsided after morning trading on Monday. Investors, hence, showed some enthusiasm to buy stocks that took serious hit in the past couple of sessions. Turnover remained upbeat with Rs 6.7 billion worth of shares being traded on the day.

Most of the sectors witnessed gains on the day. Only Trading, Hotels and Mutual Fund sectors ended the day in negative territory. Gains were led by Manufacturing & Processing sector with the sub-index rallying 3.04%. ‘Others’ segment also jumped 2.51%. Hydropower, Life Insurance, Banking and Microfinance sub-indices also saw advances of over 1% each. All other segments eked out moderate gains.

Nepal Life Insurance Company Ltd and Nepal Reinsurance Company Ltd were traded the most with turnovers of Rs 729 million and Rs 574 million. NIC Asia Bank Ltd, Nabil Bank Ltd and Himalayan Distillery Ltd were the other active stocks with turnovers of Rs 448 million, Rs 318 million and Rs 270 million. Citizen Investment Trust, Nepal Telecom Ltd and Shivam Cements Ltd’s stocks were also actively traded.

Shares of NIC Asia Bank Ltd saw the biggest percentage gain of the day. The stock rallied 9.90%. NMB Microfinance Bittiya Sanstha Ltd, Kalika Power Company Ltd and Shivam Cements Ltd posted gains of 6.22%, 5.82% and 5.36%. Radhi Bidyut Company Ltd, Liberty Energy Company Ltd and Upper Tamakoshi Hydropower Ltd were the other major gaining scrips of the day.

On the other hand, Narayani Development Bank Ltd and United Idi Mardi RB Hydropower Ltd suffered the most as both stocks tanked to hit the lower circuit of negative 10%. Nepal Hydro Developers Ltd, Everest Bank Ltd Convertible Preference Share and Swabhimaan Laghubitta Bittiya Sanstha Ltd fell 5.49%, 3.85% and 3.65%. Taragaon Regency Hotels Ltd, Best Finance Company Ltd and Salt Trading Corporation Ltd were the other major laggards.

As per the ARKS technical analysis, the market formed a bullish candlestick with a long lower wick reflecting buyers pushing the prices higher after morning rout. Despite the formation of a green candlestick, the market is yet to confirm a rebound from the recent slump. Hence, the upcoming sessions will be crucial as the market consolidating above 1,900-mark will indicate a probable recovery. On the other hand, the breach of psychological 1,900 mark towards the downside will point towards further weakness in the equity market.

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)

www.arkscapitaladvisors.com

 
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