Weekly Market Commentary

Last week of fiscal year ends on a positive note

Published On: July 16, 2021 10:27 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 16: The equity market opened last trading week of the financial year 20/21 on an upbeat footing. Rallying more than 74 points on Sunday, the Nepal Stock Exchange (Nepse) index reached 2,900 mark. However, on the court’s decision to reinstate the parliament and order to the president to appoint Congress leader Sher Bahadur Deuba as the prime minister, stocks saw weakness amidst uncertain political outlook. Selling pressure was witnessed on Monday as the index fell around 45 points. The equity market witnessed confidence towards the end of the week with gains of 16 points, 1 point and 11 points on Tuesday, Wednesday and Thursday. Overall, weekly gain tally stood at 58.27 points or 2.06% with the index ending fiscal year at 2,883.38. 

Following three straight weeks of losses, the equity market found some footing despite the political changes in the week. While the market was still in correction since Mid-June, the political uncertainty and quarter end selling pressure made little impact in the investors’ sentiment. Hence, the equity market has continued to hover around 2,800-2,900 zone in the last couple of weeks. Investors will now be eying the upcoming financial statements to gauge the possible direction of the equity market. Besides, in the recent notices, banks have mostly kept their interest rates stagnant, which can also help the stock market hold its ground. Weekly turnover rose to Rs. 37 billion compared to Rs. 23 billion in the week earlier.

Sensitive Index jumped 2.22%, reflecting strength in Class ‘A’ stocks. Most of the sectors finished the review period higher. Only ‘Others’, Hotels & Tourism, Manufacturing & Processing and Trading sub-indices ended marginally lower. 

Finance stocks registered a notable upside move of 16.05%, while Development Bank stocks climbed 7.03%. Hydropower sub-index posted a weekly gain of 6.03%. Microfinance, Mutual Fund and Banking sub-indices rose around 2% each. All other sectors ended the week marginally in green.

On the weekly technical front, the index formed a small bullish candlestick with a long upper wick suggesting slight bullish sentiment in the week. Though bulls were able to push the benchmark firmly higher early in the week, sellers were able to keep the gains under check. Technical indicators show mixed results indicating lack of any clear course for the equity market. A bullish candlestick in the following week will validate the extension of the upward move. 

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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