Daily market commentary

Nepse begins week in red

Published On: March 2, 2020 09:45 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Stocks began Sunday's trading on a positive note as Nepal Stock Exchange (Nepse) index added more than 35 points in the beginning session before pulling back sharply. Further, sellers prevailed in the latter trading hours as the index witnessed a steady decline to close the day with a 40.82 points retracement at 1,591.36 points.

After a 230-point rally in the last six trading sessions, bears prevailed on Sunday as traders turned to profit booking. The broader index saw a heavy drop as most of the sectors pulled back sharply. 

Despite a pulled back in the index, the turnover has still managed to record a new volume in the stock market as Rs 4.84 billion worth of securities were traded hands on the day.

Most of the sectors ended the day on negative side except Finance sub-index which rose by 0.6%. Manufacturing & Processing, Life Insurance and Non-life Insurance were the major sectors to struggle as their sub-indices dropped by 5.21%, 4.87% and 4.38%, respectively. Microfinance, Hotels, Trading and Hydropower sub-indices posted losses of 3.29%, 3.21%, 2.43%, and 2.01%, respectively. Likewise, Banking, Development Bank and Mutual Fund sub-indices posted losses over 1% each.

Among active stocks, NMB Bank Ltd, Global IME Bank Ltd, Nepal Life Insurance Company Ltd and NIC Asia Bank Ltd registered the highest transaction of the day logging transactions worth Rs 266 million, Rs 258 million, Rs 246 million and Rs 218 million, respectively. Nepal Bank Ltd, Nabil Bank Ltd and Prabhu Bank Ltd posted the turnovers of Rs 171 million, 157 million and 153 million correspondingly. Himalayan Distillery Ltd, Everest Bank Ltd and Asian Life Insurance Company Ltd were the active stocks of the day.

Share prices of Miteri Development Bank Ltd and Manjushree Finance Ltd increased by nearly 10%. Excel Development Bank Ltd, National Microfinance Bittiya Sanstha Ltd, Chhyangdi Hydropower Ltd and Arun Valley Hydropower Development Co Ltd saw their respective share prices rally by 6.62%, 4.35%, 4.04% and 3.92%, respectively. Meanwhile, share prices of Pokhara Finance Ltd and Mega Bank Ltd went up by over 2% each. Global IME Bank Ltd and Bishal Bazar Company Ltd also closed the day slightly higher.

On the other hand, Bottlers Nepal Terai Ltd witnessed the worst performance of the day as its share price tanked almost 10%. Next on the list was Swabhimaan Laghubitta Bittiya Sanstha Ltd which reported an 8.89% drop in its share price. Universal Power Company Ltd and Joshi Hydropower Company Ltd each saw their share prices fall by 7% each. It was followed by Microfinance stocks, including Womi Microfinance Bittiya Sanstha Ltd, NMB Microfinance Bittiya Sanstha Ltd, and Support Microfinance Bittiya Sanstha Ltd, which tumbled over 6% each.

As per the ARKS technical analysis, the Nepse index formed a strong bearish candlestick indicating a market correction after the 230-point rally in the previous sessions. Technical indicators, meanwhile, show the market losing slight momentum in the present context. Nonetheless, the immediate support of 1,570 points has still held ground firmly from which the market might stage a further rebound. Hence, positive movement in the coming session can validate another bounce back.

This column is produced by ARKS Capital Advisors Ltd
(Views expressed are those of the producer and do not necessarily reflect those of this publication)

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