Daily Commentary: Nepse snaps 3-day losing streak

Published On: July 24, 2020 07:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 23 : Though some early selling pressure was visible, the stock market recouped its initial losses to trade in green by mid-day on Thursday. Thereafter, the Nepal Stock Exchange (Nepse) index traded in green in the latter trading hours. Following the afternoon advance, the benchmark ended the day with a gain of 10.13 points at 1,442.61 points.

After three consecutive days of retracement, the index found some footing as it reached close to 1,400’s level. Series of profit booking had seen the index retrace notably. Meanwhile, excess liquidity has been able to drive the market after lockdown and keep it afloat. The equity index stands over 20 percent higher compared to the opening level of trading resumption. Turnover has also seen a significant improvement of late. On Thursday, over Rs 1.32 billion worth of securities were exchanged.

Most of the sectors broke their losing run on the last trading day of the week. Only Development Bank and Mutual Fund sub-indices suffered minor losses. The Non-Life Insurance segment jumped 2.88 percent, followed by Hotels subgroup which rose 2.61 percent. Life Insurance and Microfinance sectors also saw strength and registered gains of 1 percent each. All other sectors closed the day in positive territory.

Shares of Nepal Reinsurance Company Ltd continued to see active trading. Over Rs 113 million worth of the shares changed hands. Nepal Life Insurance Company Ltd, Shikhar Insurance Company Ltd and NIC Asia Laghubitta Bittiya Sanstha Ltd followed suit with turnovers of Rs 103 million, Rs 80 million and Rs 70 million, respectively. NMB Bank Ltd, NIC Asia Bank Ltd and Neco Insurance Company Ltd were the other top turnover stocks of the session.

Hotel stocks continued to see notable strength as Taragaon Regency Hotel Ltd and Oriental Hotels Ltd hit the upper circuit of 10 percent. Some microfinance stocks also rallied with Mirmire Laghubitta Bittiya Sanstha Ltd, Kalika Laghubitta Bittiya Sanstha Ltd and Mithila Laghubitta Bittiya Sanstha Ltd surging 10 percent each. Other major advances include Best Finance Company Ltd, Shikhar Insurance Co. Ltd and Ghodighoda Laghubitta Bittiya Sanstha Ltd.

On the other hand, Multipurpose Finance Ltd and Himalaya Urja Bikas Company Ltd suffered losses of 5 percent each. Next, Sindhu Bikas Bank Ltd struggled and dropped over 4 percent. Joshi Hydropower Development Company Ltd, Sanima Bank Ltd Debenture and NIC Asia Balanced Fund, correspondingly, lost over 3 percent  each.

On the technical front, the index formed a small bullish candlestick as selling pressure has subsided fairly with a drop in trading volumes. Further, technical indicators still point to some more upward movement in the present context. A bounce from the current level with increased volumes will validate the uptrend as the equity index is currently resting at the short term trend line support mark. Another bullish candlestick on Sunday, can give the opportunity to take some 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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