Daily Market Commentary

Nepse below 2,700 as sluggish trading continues

Published On: September 27, 2021 07:03 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Sept 27: The equity index fell sharply in the first few minutes of trading and lost around 35 points on Monday. After a failed recovery, the index continued to stretch its downward move. After reaching an intraday-low of 2,678, a small rise in the closing minutes saw the benchmark close with a loss of 73.05 at 2,685.42.

The index has continued its downward move ahead of the festive holidays. With buyers taking a slightly defensive approach, sellers have dominated the recent sessions. Though the market has seen notable dip, turnovers have remained modest reflecting receding momentum in the current correction. Turnover has remained subdued with only Rs. 5.12 billion worth of shares changing hands. 

All segments ended in negative territory, with Finance sector suffering the most. The sub-index dipped 4.53%. Development Bank, Non-Life Insurance and Investment sub-indices dipped more than 3% each. Heavyweight banks also tumbled 2.26%. All other segments closed firmly in red.

Arun Valley Hydropower Development Company Ltd was traded the most. Over Rs. 154 million worth of the equities changed hands. United Modi Hydropower Ltd, Himalayan Distillery Ltd and Nepal Bank Ltd posted turnovers of around Rs. 130 million each. Mainly energy stocks were heavily trade on the day. 

Newly listed Manakamana Smart Laghubitta Bittiya Sanstha Ltd and Mailung Khola Jal Vidhyut Company Ltd continued to surge closing 10% higher on the day. Gurkhas Finance Ltd rose 6.08%.

Goodwill Finance Company Ltd, United Idi Mardi RB Hydropower Ltd, Nepal Finance Ltd, Kalika Power Company Ltd, Pokhara Finance Ltd and Nepal Hydro Developers Ltd were the major laggards with each scrip tumbling more than 7%. Samriddhi Finance Company Ltd, Central Finance Company Ltd, Dibyashwori Hydropower Ltd and Janaki Finance Ltd saw losses of 6% each. 

As per the ARKS technical analysis, the equity index formed a strong bearish candlestick pointing towards possibility of index testing 2,600 support. Nonetheless, dipping volumes suggest selling pressure weakening in the current juncture. Investors must look for a volume backed rebound before taking buying positions. A consolidation around 2,600-2700 level is also likely in the current juncture.

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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