Daily Commentary: Nepse falls 15 points as investors opt for profit booking

Published On: July 21, 2020 08:57 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 21: The Nepal Stock Exchange (Nepse) opened the session slightly higher but gave up the gains quickly as the trading began. A recovery attempt saw the index turn green in the first hour but selling pressure after midday pushed the index towards red. At the close, Nepse fell 14.99 points to end Tuesday’s trading at 1,449.94 points.

Following a pull back on Monday, stocks continued to sink as profit booking extended further. Besides, the equity index saw 7 consecutive days of winning run where it collected over 150 points. Hence, some retracement was on the cards. Market activity meanwhile remained robust as almost Rs 2 billion worth of shares were exchanged in the session.

Majority of the market indices fell. The biggest losers were hydropower stocks with the group’s sub-index dropping 2.14 percent. Heavyweight banks also struggled as the Banking index went down by 1.61 percent. Life Insurance and Finance sub-indices closed around 1 percent lower.

Development Bank, Non-Life Insurance, ‘Others’ and Microfinance segments also sank marginally. On the other hand, Hotel stocks rallied over 5 percent, followed by Manufacturing & Processing and Trading sectors which rose over 2 percent each. Microfinance sector closed unchanged.

Himalayan Distillery Ltd led the list of activities with over Rs 142 million worth of the beverage manufacturer’s shares being traded. NMB Bank Ltd and Nepal Reinsurance Company Ltd registered turnovers of Rs 140 million and Rs 124 million, respectively. NIC Asia Bank Ltd, Nepal Life Insurance Company Ltd and Nabil Bank Ltd were also heavily traded on Tuesday.

On the gainers front, shares of NIC Asia Laghubitta Bittiya Sanstha Ltd stretched its surge further adding 10 percent on its price. Shree Ram Sugar Mills Ltd and Samriddhi Finance Company Ltd also climbed over 9 percent each. Soaltee Hotel Ltd, Unilever Nepal Ltd, Nepal Hydro Developers Ltd and Oriental Hotels Ltd were among other major advances.

In contrast, shares of Himal Dolakha Hydropower Company Ltd tanked 9.8 percent, while those of Gurans Laghubitta Bittiya Sanstha Ltd sank 9 percent. Sparsha Laghubitta Bittiya Sanstha Ltd and Ghodighoda Laghubitta Bittiya Sanstha Ltd ended down by over 7 percent. Khani Khola Hydropower Co. Ltd, Vijay Laghubitta Bittiya Sanstha Ltd and Rastriya Beema Company Ltd Promoter Shares were among other major losing stocks.

The market, as per the ARKS technical analysis, formed a small bearish candlestick on the daily timeframe extending losses for a second straight day. The correction has brought the index towards the 1,450-point mark, where further dip might see the index test the support of 1,400 points. As long as the market stays above the 1,350-point mark, the uptrend will still be intact. Meanwhile, technical indicators reflect subdued momentum in the present context. Cautious trading is suggested, while buying position can be taken only after a volume backed rebound.

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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