Daily market commentary

Nepse begins 2021’s trading on a firmly upbeat note

Published On: January 4, 2021 06:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 4: After ending at a fresh high in the last trading session of the year 2020, stocks saw further strength entering 2021. On the first session of the year, the Nepal Stock Exchange (Nepse) index advanced since morning trading. The benchmark rose more than 50 points by mid-day before correcting slightly. However, a steady rise in the remaining trading hours pushed the index 88.12 points higher to settle at 2,175.40.

With the day’s advance, the index has stretched its gains for five straight sessions. Consequently, the index also marked its new high at 2,175 point’s mark in the first trading day of the year. With interest rates still on the lower side of the spectrum, the equity market has only seen minor corrections in the sessions of late. Hence, investors have largely maintained a positive bias in the equity market. Turnover also improved on the day. Over Rs. 6.34 billion worth of securities were traded on Sunday.

Trading sub-index outperformed the broader equity market and rallied 9.64%. ‘Others’ sector also shot up by 6.19%. Similarly, Manufacturing & Processing, Banking and Life Insurance sub-indices saw notable charm and registered gains of over 4 % each. All other sectors ended the day in positive territory.

In terms of top turnover stocks, Nepal Life Insurance Company Ltd’s shares were heavily traded. Over Rs. 509 million worth of the life insurer heavyweight’s shares changed hands. Prime Commercial Bank Ltd also saw active trading as Sunday was the ex-dividend date for the commercial bank. The bank also witnessed a turnover of over Rs. 500 million. Nepal Telecom Ltd and Nepal Reinsurance Company Ltd followed suit with turnovers of Rs. 450 million and Rs. 275 million. NIC Asia Bank Ltd, Everest Bank Ltd, Shivam Cements Ltd and Prabhu Bank Ltd were the other active stocks of the day.

Salt Trading Corporation and Himalayan Distillery Ltd led the list of gainers as both scrips surged exactly 10%. Nepal Reinsurance Company Ltd, Prime Commercial Bank Ltd and Kumari Bank Ltd also remained locked within the positive circuit limit of 10%. National Microfinance Bittiya Sanstha Ltd, Gurans Laghubitta Bittiya Sanstha Ltd and Asha Laghubitta Bittiya Sanstha Ltd followed suit with gains over 8% each.

On the other hand, Radhi Bidyut Company Ltd suffered the most with a decline of 4.29%. Shiva Shree Hydropower Ltd and United Finance Ltd followed suit with losses of over 3% each. Butwal Power Company Ltd, 10.25% Nepal Investment Bank Debenture 2082 and Chhyangdi Hydropower Ltd fell around 2% apiece.

In terms of ARKS technical analysis, the market formed a strong bullish candlestick marking a fresh high. With the day’s advance, the index has made a breakout above 2,100 resistance level pointing towards further gains in the equity market. Momentum indicators also reflect buyers gaining control in the current scenario. While some correction can be expected, the overall uptrend in the equity market has remained intact.

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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