Daily Commentary: Stocks climb higher for a third straight session

Published On: July 7, 2020 08:00 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 7: Market sentiment remained firmly bullish throughout the trading session on Tuesday. The Nepal Stock Exchange (Nepse) index shot up by 30 points within the first half an hour of trading. Following a minor pullback at mid-day, the stock market witnessed a steady advance in the late afternoon to close Tuesday’s trading firmly higher. Nepse settled at 1,336.66 points – up 37.93 points against the previous session.

Tuesday’s advance marked three straight days of gains as the shareholders have enjoyed a firmly upbeat week so far. A modest rise on Sunday was followed by some strong buying conviction in Monday’s and Tuesday’s trading sessions. In the meantime, the market has continued to witness a notable turnover with an average daily turnover of Rs 1 billion. The day’s rally was mainly fueled by investors taking long positions in almost all of the traded segments.

The Hotels sector led the advance as the most hit sector made a remarkable recovery on the day. The group’s sub-index jumped 8.88 percent. The Non-life Insurance segment followed suit and rose 6.32 percent, while the Trading sub-index rose 4.18 percent. ‘Others’, Microfinance and Finance stocks also gained strength and closed up by over three percent each. All other sub-indices posted decent gains.

Shares of Nepal Reinsurance Company Ltd have traded actively since the listing in the exchange. Over Rs 91 million worth of the shares were traded on Tuesday. Next, Nepal Life Insurance Company Ltd saw a turnover of Rs 86 million. Himalayan Distillery Ltd, NMB Bank Ltd and Chhimek Laghubitta Bittiya Sanstha Ltd logged in transactions of Rs 58 million, Rs 50 million and Rs 42 million, respectively. NIC Asia Bank Ltd, Shivam Cements Ltd and Neco Insurance Co Ltd were among other active stocks of the day.

Among advances, five companies shot up by exactly 10 percent each. Prudential Insurance Co Ltd, Manjushree Finance Ltd, Nepal Reinsurance Company Ltd, Nepal Seva Laghubitta Bittiya Sanstha Ltd and Oriental Hotels Ltd were the major gainers. Himalayan General Insurance Company Ltd, Suryodaya Laghubitta Bittiya Sanstha Ltd, Samudayik Laghubitta Bittiya Sanstha Ltd, Siddhartha Insurance Ltd and Prabhu Insurance Ltd also rose by over nine percent each.

On the other hand, Khanikhola Hydropower Co Ltd suffered the biggest loss of the day. Its share price dropped almost four percent. The shares of Global IME Laghubitta Bittiya Sanstha Ltd, Ghalemdi Hydro Ltd and Reliance Finance Ltd also came under significant pressure giving up almost three percent each. NIC Asia Bank Ltd Promoter Share, Global IME Sammunat Scheme – 1 and Synergy Power Development Ltd closed down by around two percent each.

In terms of ARKS technical analysis, the market formed a bullish candlestick for a third straight day as buyers remain in full control of the market. With Moving Average Convergence Divergence (MACD) forming a golden cross, the market is pointing towards a shift in momentum making further rally likely. Nonetheless, the index might face a resistance toward 1,350 – 1,360 points zone making the movement of the index around the level crucial in gauging the possible direction of 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)





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