Daily Commentary: Nepse ends in green after Thursday’s rout

Published On: July 5, 2020 07:46 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 5: The fear of decline carried over to Sunday’s trading session initially. In the first few minutes of trading, the equity market came under pressure and shed 10 points. A quick recovery pushed the Nepal Stock Exchange (Nepse) index 25 points higher, but another wave of selling pressure dragged the index back to red by the end of the first trading hour. A steady advance followed suit in the latter trading hours as Nepse closed with a moderate gain of 9.35 points to close the session at 1,265.45.

Despite the index tanking sharply on Thursday forcing a trading halt, the overall sentiment remained upbeat on Sunday’s trading. The market has been able to hold ground even though many stakeholders expected a significant decline in the post-lockdown relaxation trading. Moreover, notably an active session was witnessed in the bourse as the turnover crossed the Rs 1 billion mark.

Sectors ended mixed. Most of the gains came from the ‘Others’ sector as the group’s sub-index jumped almost three percent. The Life Insurance sub-index closely followed with a 2.9 percent gain. Manufacturing & Processing, Hotels, Non-Life Insurance, Microfinance and Banking segments also ended higher. The worst performance of the day was seen among Trading segment stocks. The respective sub-index crashed over eight percent. Similarly, the Mutual Fund sub-index closed 1.8 percent lower. Finance, Hydropower and Development Bank also ended lower.

Shares of Nepal Reinsurance Company Ltd led the list of active scrips. Over Rs 151 million worth of the reinsurer’s stocks changed hands. Next, Nepal Life Insurance Company Ltd registered a transaction of Rs 102 million. Nabil Bank Ltd, NMB Bank Ltd and Himalayan Distillery Ltd saw turnovers of at least Rs 40 million each. Shivam Cements Ltd, NIC Asia Bank Ltd and Citizen Investment Trust were also heavily traded on the day.

Suryodaya Laghubitta Bittiya Sanstha Ltd and Janautthan Samudayic Laghubitta Bittiya Sanstha Ltd were the biggest percentage gainers of the day. Both scrips shot up by almost 10 percent. Synergy Power Development Ltd stocks also saw considerable strength and closed over eight percent higher. Further, Sparsha Laghubitta Bittiya Sanstha Ltd, National Hydropower Company Ltd and Ghodi Ghoda Laghubitta Bittiya Sanstha Ltd rose seven percent, six percent and five percent, respectively.

On the decliners front, Central Finance Co Ltd and Salt Trading Corporation remained locked in the lower circuit of 10 percent. Shares of Api Power Company Ltd, meanwhile, tanked 8.55 percent. National Microfinance Bittiya Sanstha Ltd and Joshi Hydropower Development Company Ltd’s shares also struggled giving up over seven points by Thursday’s close. Bottlers Nepal Terai Ltd, Swabalamban Laghubitta Bittiya Sanstha Ltd and Miteri Development Bank Ltd were among other major decliners with losses of over five percent each.

On the ARKS technical front, the market formed a small spinning top bullish candlestick on the daily timeframe as the sentiment remains fairly neutral. The index still rests around the support zone of 1,250-1,260 points where a notable bounce can see the index surge higher toward the next resistances at 1,300 points and 1,350 points mark. Momentum indicators also indicate selling pressure easing off in the present context. However, a breach of the current support toward the downside might trigger further sell off.

This column is produced by ARKS Capital Advisors Ltd

(The views expressed in the article are those of the producer and do not necessarily reflect those of this publication.)


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