Daily market commentary: Stocks end Monday’s session with modest gain

Published On: January 12, 2021 06:00 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 11: After opening the day around 30 points higher, the local equity market benchmark witnessed correction amidst active profit booking. The Nepal Stock Exchange (Nepse) index traded 20 points higher at mid-day but experienced a steady decline in the afternoon trading hours. After trading in red briefly in the final hour, a recovery at the end saw Nepse close with a 3.70 gain at 2,239.43.

With the day’s gain, the stock market closed in the positive territory for a fourth straight day. While some profit booking was evident in Monday’s session, the stock market largely traded in equilibrium with selling pressure being absorbed by the buyers. Nonetheless, cautious trading was witnessed in the secondary market as volume fell slightly against the day earlier. Rs. 5.52 billion worth of shares were traded on the day.

Sectors ended the day mixed. Non-Life Insurance stocks led the gains with the sub-index rising 1.75%. Finance, Development Banks and Life Insurance sub-indices added over 1% each. Mutual Fund, Hydropower and Banking sub-indices eked out minor gains. On the other hand, ‘Others’ and Manufacturing & Processing stocks fell 0.82% and 0.72%. Trading, Microfinance and Hotels sub-indices ended marginally lower.

Siddhartha Bank Ltd’s shares were traded the most ahead of its ex-dividend date. Over Rs. 426 billion worth of the bank shares changed hands on Monday. Prabhu Bank Ltd’s shares were also actively traded with a turnover of Rs. 251 billion. NMB Bank Ltd, Civil Bank Ltd and National Life Insurance Company Ltd, meanwhile, registered turnovers of over Rs. 180 billion. Kumari Bank Ltd, NIC Asia Bank Ltd, Global IME Bank Ltd and Nepal Reinsurance Company Ltd were among other active stocks.

On the gainers front, Aarambha Chautari Laghubitta Bittiya Sanstha Ltd, Narayani Development Bank Ltd, United Finance Ltd and Corporate Development Bank Ltd saw considerable strength with each stock surging almost 10% each. Prabhu Life Insurance Ltd, IME General Insurance Ltd, Civil Bank Ltd and Sadhana Laghubitta Bittiya Sanstha Ltd were the other major advances of the session.

In contrast, Multipurpose Finance Ltd’s shares suffered the most. The finance stock fell 6%. Gurkhas Finance Ltd dropped 3.7%, while Civil Laghubitta Bittiya Sanstha Ltd shed 3.64%. Citizens Bank International Ltd and Khani Khola Hydropower Co. Ltd registered losses of around 3.5% each.

On the technical front, the equity market formed a small bearish candlestick as the market closed below the opening level. Consequently, the market points towards the possibility of some correction. Overall, the market has found good support at 2,150 point’s mark and has continued to extend the uptrend since the rebound from the aforementioned point. Momentum indicators suggest overbought reading making some consolidation or correction likely in the present context.

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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