Daily Commentary: Stocks under pressure on profit taking ahead of festive season

Published On: October 13, 2020 08:30 PM NPT By: Republica  | @RepublicaNepal


Nepse benchmark index falls 9.42 points

KATHMANDU, Oct 13: Despite opening around 5 points higher in the morning, the Nepal Stock Exchange (Nepse) index came under pressure in the latter part of Tuesday’s session. The benchmark traded 4 points lower for most of the afternoon, while a drag towards the close saw the index accelerate losses. The benchmark index fell 9.42 points to close session at 1,568.59.
Sellers prevailed on the day as notable profit booking was seen on sectors like hydropower, finance and development bank stocks. All these sectors have seen substantial rallies in the past couple of weeks. Market participation also remained subdued with the index turning red. Total turnover remained under Rs 2 billion mark. 
Most of the sectors corrected firmly on the day. The major losers include hydropower and finance stocks. Sub-indices of both fell around 2% each. Non-Life Insurance and Banking sub-indices fell 0.6% each, while Hotels and Microfinance sub-groups lost over 0.5% each. All other sectors suffered minor losses, barring Mutual Fund, Manufacturing & Processing and Trading stocks, which edged marginally higher. 
Among actives, Arun Kabeli Power Ltd’s shares were traded the most. The stock saw a total transaction of over Rs 113 million. Jyoti Bikas Bank Ltd and Muktinath Bikas Bank Ltd followed suit with turnovers of Rs 111 million and Rs 85 million. Nepal Reinsurance Company Ltd, Sanima Mai Hydropower Ltd and Nepal Bank Ltd registered turnovers of Rs 63 million, Rs 54 million and Rs 52 million, respectively.
Gains were led by Jyoti Bikas Bank Ltd as the development bank stocks jumped 4.83%. Laxmi Unnati Kosh and Unilever Nepal Ltd also saw strength and posted advances of over 3% each. NIBL Pragati Fund, Citizen Mutual Fund – 1 and ICFC Finance Ltd climbed 2.36%, 1.76% and 1.55%, respectively. 
On the other hand, Panchakanya Mai Hydropower Ltd witnessed the biggest loss of the day. The energy scrip tanked 8.72%. Similarly, other hydropower stocks also struggled. Dibyashwori Hydropower Ltd, Khanikhola Hydropower Co. Ltd and Ridi Hydropower Development Company Ltd closed over 7% lower each. Ghalemdi Hydro Ltd, Samriddhi Finance Co. Ltd and Union Hydropower Ltd were among other major decliners with losses of over 6%. 
On the news front, United Insurance Co. (Nepal) Ltd published a notice on Nepse regarding approval and submission of financials to Beema Samiti. In the same notice, the non-life insurer also stated that it will not be distributing any dividend for the fiscal year 2018/19. 
As per the ARKS technical analysis, the index formed a bearish candlestick on the daily timeframe suggesting sellers’ dominance in the session. However, volumes have been subsiding notably, which reflects sellers losing momentum gradually. With the drop, the index is also close to its support at around 1,550 points mark. A rebound from the aforementioned level might provide buying opportunities for investors. Meanwhile, some caution must be taken as the index might see sideways movement ahead of the festive season. 
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)
www.arkscapitaladvisors.com

 


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