Daily market commentary

Investors cautious ahead of monetary policy announcement

Published On: July 10, 2019 03:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 10: Nepali stocks witnessed a choppy session in the first half of Tuesday's trading as the Nepal Stock Exchange (Nepse) index remained essentially unchanged. The index found some ground after mid-session and witnessed a moderate advance to close the day with a gain of 2.92 points at 1,250.27 points. Selling pressure eased slightly with the day's gain as the benchmark index snapped its three-day losing streak. Subsequently, the index has also climbed above the 1,250-point mark. However, the bourse is still trending sideways as it lacks any significant conviction.

Investors are largely taking a 'wait and see' approach toward the market as the monetary policy announcement is due within short order. Market activity dropped below Rs 500 million mark, as only Rs 468 million worth of shares were traded on the day. Majority of traded sectors ended the day in green. Modest losses were visible among Non-Life Insurance, Hotels, Mutual Fund and Microfinance segments. On the other hand, gains came mainly from Finance stocks with the group's sub-index adding 0.8 %. Life Insurance, Hydropower and Banking sub-indices also edged higher with respective gains of 0.4%, 0.36% and 0.35%. Further, all other sectors eked out marginal gains. Nepal Investment Bank Ltd Promoter Share experienced the highest transaction on Tuesday.

More than Rs 60 million worth of the scrips changed hands on Tuesday. Laxmi Bank Ltd and Nepal Bank Ltd were also actively traded with turnovers of Rs 41 million and Rs 26 million, respectively. NIC Asia Bank Ltd, Mega Bank Ltd and Nepal Life Insurance Company Ltd were among other active stocks of the day.

Infinity Laghubitta Bittiya Sanstha continued to see its share price surge, stretching its gains further by 10%. Multipurpose Finance Company Ltd and Radhi Bidyut Company Ltd also saw considerable strength as their respective share prices rallied by 8% and 7%. Laxmi Laghubitta Bittiya Sanstha Ltd, Gurans Laghubitta Bittiya Sanstha Ltd and Ghalemdi Hydro Ltd followed suit with advances of over 3% each.

Support Microfinance Bittiya Sanstha Ltd, on the other hand, logged the worst performance of the day with a 4% slump on its share price. Likewise, Summit Laghubitta Bittiya Sanstha Ltd and City Express Finance Company Ltd saw their respective share prices drop by almost 4% in the session. Other losing stocks include National Microfinance Bittiya Sanstha Ltd, Everest Insurance Co Ltd and Ankhu Khola Jalavidhyut Company Ltd.

On the announcement front, Prabhu Insurance Ltd is holding its Annual General Meeting (AGM) on August 2. The insurer has not announced any dividend for Fiscal Year 2017/18.

As per the ARKS technical analysis the market formed a small bullish candlestick after three days of losses. Consequently, the index has reverted back to the crucial 1,250-point mark and stretched its range bound movement. Hence, indecisiveness still prevails in the market. Momentum indicators also suggest neutral sentiment in the present context as the market is yet to indicate a plausible market direction.

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