Daily Market Commentary

Stocks recoup previous day losses in Wednesday’s trading

Published On: January 27, 2021 06:43 PM NPT

KATHMANDU, Jan 27: After opening Wednesday’s session in green, the Nepal Stock Exchange (Nepse) index pulled back in the morning to trade in red briefly before mid-day. The benchmark staged a recovery in the afternoon advancing as high as 2,450 mark. The index retraced slightly thereafter and closed trading session 18.76 points higher at 2,441.85.

The momentum lost some steam in Tuesday’s trading as traders resorted to booking gains in most of the sectors. However, notable enthusiasm in insurance and microfinance stocks on Wednesday helped the equity market get back to its winning ways. Over Rs. 8 billion worth of securities were exchanged in the day.

Sectors ended mixed. Life Insurance stocks saw significant buying pressure. The group’s sub-index shot up by 6.25%. Non-Life Insurance segment, similarly, jumped 3.98%. Microfinance, Trading and Mutual Fund sub-indices also ended in green. On the other hand, Hotels sub-index corrected the most and fell 1.18%. Banking, Finance and Manufacturing & Processing sectors also edged 0.57% lower. Development Bank, Hydropower and ‘Others’ sectors also ended marginally in red.

Nepal Life Insurance Company Ltd continued to see heavy volumes. Almost Rs. 1 billion worth of the life insurer’s shares changed hands. Prime Commercial Bank Ltd, Nepal Bank Ltd and Prabhu Bank Ltd witnessed turnovers of Rs. 379 million, Rs. 281 million and Rs. 278 million. National Life Insurance Company Ltd, Shikhar Insurance Company Ltd, Nepal Telecom Ltd and National Hydropower Company Ltd were among other actively traded shares.

Nepal Life Insurance Company Ltd, Aarambha Chautari Laghubitta Bittiya Sanstha Ltd, Gurans Laghubitta Bittiya Sanstha Ltd and Support Laghubitta Bittiya Sanstha Ltd remained locked in the upper circuit of positive 10%. Prabhu Life Insurance Ltd, National Hydropower Company Ltd, Shikhar Insurance Company Ltd and Premier Insurance Company Ltd were the other major gainers on Wednesday.

In contrast, Pokhara Finance Ltd tanked 7.05%. Citizens Mutual Fund 2, Shree Investment and Finance Co. Ltd and Nepal Finance Ltd registered declines of over 4% each. Gurkhas Finance Ltd, Himal Power Partner Ltd, Corporate Development Bank Ltd and Nepal Bank Ltd also struggled with declines of over 3% each.

As per the ARKS technical analysis, the market formed a small bullish candlestick showing sign of consolidation around the current range. Given the market holds ground above 2,400 mark, a notable correction is unlikely. Hence, investors must maintain a watchful stance in the current juncture to gauge the potential direction of the equity market. Another resistance can be taken as 2,500 mark. Momentum indicators also indicate buyer’s dominance in the equity market of late. 

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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