Daily Commentary: Stocks recoup morning losses to end slightly lower

Published On: September 30, 2020 09:29 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Sept 30: The local stock market witnessed selling pressure since the beginning of Wednesday’s session. After dropping 10 points in the afternoon, the Nepal Stock Exchange (Nepse) index plateaud around 1,540-point’s mark. Thereafter, the equity market gathered some strength erasing earlier losses. At the close, Nepse ended 3.19 points lower at 1,550.43.

The decline also marks a third straight day of loss in the Nepalese share market. However, losses have remained modest with the index maintaining its footing above 1,550 point’s mark firmly. Hence, despite lack of enthusiasm seen in the market, the overall sentiment remains upbeat. Turnover was just shy of Rs 2 billion mark on Wednesday.

Gains came mainly from development bank stocks with the group’s sub-index rising 1.87%. Mutual Fund sectors also rose 1.19%. Hydropower and Finance sectors stretched gains closing 0.67% and 0.39% higher. On the other hand, Trading sector fell the most. The segment’s sub-index ended 1.06% lower. Hotels sector also slumped with a 0.85% loss. All other sectors edged lower.

Nepal Reinsurance Company Ltd was the most actively traded share in the session. Over Rs 112 million worth of the scrip changed hands. Arun Kabeli Power Ltd and National Hydropower Company Ltd’s shares were also heavily traded in the session with turnovers of Rs 98 million and Rs 92 million, respectively. Himal Dolakha Hydropower Company Ltd, Api Power Company Ltd and Arun Valley Hydropower Development Company Ltd were among other top turnover stocks.

Joshi Hydropower Development Company Ltd and Kamana Sewa Bikas Bank Ltd saw the biggest percentage gain in the day. Both scrips rallied exactly 10%. Ankhu Khola Jalvidhyut Company Ltd, Ghalemdi Hydro Ltd, Union Hydropower Ltd, Panchakanya Mai Hydropower Ltd and Khani Khola Hydropower Co. Ltd were among other major advances, which rallied over 9% each.

In contrast, Nepal Finance Ltd suffered the most as its share price tumbled 6.87%. Ngadi Group Power Ltd and Panchthar Power Company Ltd also came under pressure giving up around 3% each. United Finance Ltd, Rairang Hydropower Development Company Ltd and Laxmi Laghubitta Bittiya Sanstha Ltd, meanwhile, saw declines of over 2% each.

As per the ARKS technical analysis, the market formed a small bearish candlestick, reflecting neutral to slightly bearish sentiment in the equity market. Technical indicators also reflect subsiding momentum in the market off late. However, the index has held ground firmly above 1,550 point’s psychological level, which suggests that the index is yet to break its short term uptrend. Hence, a rebound can give buying opportunity to investors, while a breach of the 1,550 mark towards the downside will indicate possibility of retracement towards 1,500 point’s level.

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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