Daily market commentary

Market pares intraday gains as Nepse closes in red

Published On: December 25, 2019 10:19 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Dec 25: The Nepal Stock Exchange (Nepse) index traded mostly in green on Tuesday. The benchmark index climbed to the 1,175-point level three times in the session but failed to hold ground as the closing hours saw the index pull back sharply toward the negative territory. Eventually, Nepse closed the day 2.37 points lower at 1,166.21 points.

Following an 18-point rally on Monday, the index retraced slightly as sellers dominated the day's session. Nonetheless, active market participation was witnessed on the day as daily turnover rose by over 20% to Rs 722 million.

Sectors posted mixed performance on the day. Hotels segment suffered the most as the group's sub-index saw a correction of 1.9%. Non-life Insurance and Life Insurance stocks also witnessed losses with their respective sub-indices falling by 1.29% and 0.72%. Microfinance, Development Bank, Manufacturing & Processing and Hydropower sub-indices also closed the day in red. On the other hand, Trading sub-index climbed up by 0.28%. Mutual Fund, Banking, 'Others' and Finance stocks also climbed marginally higher.

Shares of Shivam Cements Ltd ware traded the most on Tuesday. After a three-day rally, the manufacturer's share witnessed some selling pressure amid profit booking by traders. More than Rs 103 million worth of its shares changed hands on the day. Citizen Investment Trust followed suit with a turnover of Rs 88 million, while Nepal Bank Ltd saw turnover of Rs 76 million. Butwal Power Company Ltd, Himalayan Distillery Ltd and Salt Trading Corporation were among other active scrips.

Among advances, share price of Support Microfinance Bittiya Sanstha Ltd hit the upper circuit of 10% for the second straight day. 

Share prices of Kanchan Development Bank Ltd, Panchthar Power Company Ltd and Chhyangdi Hydropower Ltd also rallied by over 9% each. Furthermore, Joshi Hydropower Development Company Ltd, Himalayan Power Partner Ltd and Gurkhas Finance Ltd posted gains of 8.33%, 6.72% and 5.5%, respectively.

On the other hand, Ankhu Khola Jalvidhyut Company came under considerable pressure as its share price fell by more than 7% on the day. Share price of Ridi Hydropower Development Company Ltd also down by over 5%. Other losing scrips include Gurans Laghubitta Bittiya Sanstha Ltd, Saptakoshi Development Bank Ltd and Shrijana Finance Ltd which lost more than 4% each.

In corporate space, Nepal's only listed telecom provider, Nepal Telecom Company Ltd, has declared a cash dividend of Rs 45 per share. It has also scheduled its annual general meeting (AGM) for January 14.

In terms of ARKS technical analysis, the market formed a shooting star bearish candlestick which usually suggests possibility of further correction. The index also faced a resistance at around 1,180-point level. The turnaround from which suggests possibility of another drop to 1,150-point level. For the market to post another rally, the breach of 1,180-point level is crucial. On the other hand, Nepse's fall below 1,150 points might see the index move to another low of around 1,120 points.

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