Daily Market Commentary

Nepse caps end of the year session with 25-point gain

Published On: December 31, 2020 07:00 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Dec 31: Following an upbeat session on Wednesday, the stock market witnessed strength since the beginning of Thursday’s trading. After reaching close to 2,100 level in the morning, the Nepal Stock Exchange (Nepse) index pulled back sharply within the first 15 minutes of trading. Nonetheless, the benchmark held its ground in positive territory throughout the latter trading hours. The index shot up by 50 points at mid-session but gave up some of its gains in late afternoon. At the close, Nepse registered a gain of 25.21 points to end the last trading session of the year 2020 at 2,087.28.

After a rebound from the 2,000 mark the index has gradually registered gains for four consecutive sessions pushing the market above its all-time closing high of 2,071 mark reached at the beginning of December. With the advance seen in the bourse, total turnover also saw improvement. Over Rs. 5.7 billion worth of securities were traded in the day.

In terms of sectoral performance, Trading sub-index led the gains with a rally of 8.89%. Heavyweight banks also contributed towards the index’s movement. Banking sub-index rose 1.97%. ‘Others’ and Life Insurance sub-indices also saw strength ending over 1% higher each. All other sectors finished the day in green barring Non-Life Insurance sub-index which fell 1% on the day.

Shares of Himalayan Distillery Ltd were traded the most ahead of its book closure for the Annual General Meeting. Over Rs. 468 million worth of the beverage manufacturer changed hands on the ex-dividend date. Nepal Life Insurance Company Ltd, Citizen Investment Trust and Nepal Telecom Ltd’s shares were also actively traded with the scrips posting turnovers of Rs. 371 million, Rs. 288 million and Rs. 285 million, respectively. NIC Asia Bank Ltd, Shivam Cements Ltd and Everest Bank Ltd were the other active stocks of Thursday.

Among gainers, Salt Trading Corporation saw the biggest percentage gain in the session. The stock hit the upper circuit limit of positive 10%. Everest Bank Ltd and Goodwill Finance Co. Ltd followed suit with gains of around 6% each. Furthermore, Laxmi Bank Ltd, Siddhartha Bank Ltd and Nepal SBI Bank Ltd also saw strength with gains of over 5% apiece.

Narayani Development Bank Ltd, on the other hand, suffered the most as the stock price tumbled 3.78%. Shares of IME General Insurance Ltd and Kalika Laghubitta Bittiya Sanstha Ltd also came under pressure with declines of around 3% each. Rastriya Beema Company Ltd, Nabil Balanced Fund-2and Mountain Energy Nepal Ltd were the mother major decliners with losses of over 2% each.

As per the ARKS technical analysis, the equity market formed a bullish candlestick on the daily timeframe. Though the index closed above its all-time closing high, the market still trades below the psychological 2,100 point’s mark. Hence, for further confirmation of extension of the uptrend, a close above this level will be crucial. A retracement, on the other hand, can see the index correct further. Immediate support of the equity market lies at 2,000 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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