Daily Commentary: Stocks erase morning losses to end Wednesday’s trading in green

Published On: September 23, 2020 09:38 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Sept 23: The Nepal Stock Exchange witnessed some weaknesses in the morning extending previous day’s losses. However, after dropping towards 1,530 point’s mark, the Nepse benchmark index was buoyed by notable buying pressure in the afternoon. The index climbed towards green at mid-session and maintained positive bias in the latter trading hours. At the close, Nepse closed 9.37 points higher at 1,555.53 points.

After tumbling below the 1,550-point mark in the previous day, investors maintained a cautious approach in the opening hours of Wednesday’s session. With the drop in the market, volumes subsided drastically in the morning.Selling pressure eased up as prices went lower indicating bears losing grip at intraday period. Subsequently, a broad recovery helped the index recoup some of its previous day losses. Turnover remained above par with over Rs 1.7 billion worth of shares being traded on the day.

Hydropower sector witnessed notable charm in the day after correcting in the past few sessions. The index jumped 2.8% followed by Finance and Development Bank sub-groups which rose 1.64% and 1.26%. Life and Non-Life Insurance sectors also advanced around 1% each. Manufacturing & Processing and ‘Others’ sub-indices also saw strength. All other sectors ended in positive territory, while only Hotels sub-group ended lower.

Shares of Shikhar Insurance Company Ltd were traded the most on Wednesday. The non-life insurer registered a total turnover of Rs 109 million. Nepal Bank Ltd and Nepal Reinsurance Company Ltd followed suit with turnovers of Rs 96 million and Rs 87 million. Arun Valley Hydropower Development Co Ltd posted a turnover of Rs 56 million, while Reliance Life Insurance Ltd saw a total transaction of Rs 45 million.

Energy stocks dominated the list of top gainers. Arun Valley Hydropower Development Company Ltd, Mountain Hydro Nepal Ltd, United Modi Hydropower Ltd, Union Hydropower Ltd and Dibyashwori Hydropower Ltd jumped over 9 % apiece. Similarly, Ngadi Group Power Ltd, National Hydropower Company Ltd and Ankhu Khola Jalvidhyut Company Ltd finished more than 8% higher.

Gurkhas Finance Ltd suffered the biggest loss of the day as its share price tumbled 3.57%. Taragaon Regency Hotels Ltd and Laxmi Equity Fund fell 2% each. Similarly, Laxmi Equity Fund, 10.25% NIC Asia Debenture 2083/2084 and Soaltee Hotel Ltd struggled with declines of over 1% each.

As per ARKS technical analysis, the index formed a bullish candlestick on the daily timeframe helping the equity market finish Wednesday’s session at its intraday high. Hence, bulls have gained some control after a few sessions of correction. While Moving Average Convergence Divergence (MACD) is converging towards the signal line indicating some loss of momentum, the Relative Strength Index (RSI) still indicates some room for upward movement. Overall, the index has maintained its upward trend avoiding the formation of a lower low. Hence, buying positions can be taken if the rebound extends with a stop loss below 1,530 point’s level.

This column is produced by ARKS Capital Advisors Ltd (www.arkscapitaladvisors.com).

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


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