Daily market commentary

Nepse climbs as energy stocks rally

Published On: May 22, 2019 02:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, May 22: Stocks opened on a flat note as the Nepal Stock Exchange (Nepse) index hovered along the opening level for the beginning trading hour. A broad rally followed after mid-day, pushing the benchmark index around 10 points higher.

Stocks pulled back slightly towards the close with the Nepse index ending the day at 1,312.14 points – up 4.42 points against the session earlier.

With the modest gain on Tuesday, Nepse cut its three-day losing streak and continued to show sideways trend. Hence, some indecision is still visible in the equity market of late.

Despite the advance seen in the day, market participation dropped slightly compared to the previous trading day. Total Rs 814 million worth of shares were traded.

Most of the traded sectors closed the day in green with Hydropower sector leading the day's rise. The respective sub-index jumped over 5.34 percent on the back of the surge seen in shares of Upper Tamakoshi Hydropower Ltd.

Finance and Trading sectors also saw some strength with the respective sub-indices adding over 1 percent each. All other sub-indices edged higher barring Manufacturing & Processing, Microfinance and 'Others' sub-indices.

Investors traded shares of Nepal Bank Ltd the most. Over Rs 86 million worth of shares changed hands in the session. Shivam Cements Ltd also continued to witness high trading volumes. The scrip posted a turnover of Rs 68 million. Subsequently, major hydropower stocks were actively traded in the day with Butwal Power Company Ltd, Upper Tamakoshi Hydropower Ltd and Sanima Mai Hydropower Ltd registering turnovers of Rs 59 million, Rs 49 million and Rs 42 million, respectively.

Multipurpose Finance Co Ltd, Upper Tamakoshi Hydropower Ltd, and Corporate Development Bank Ltd saw considerable strength as all scrips hit the positive circuit of 10 percent. Reliance Finance Ltd and Support Microfinance Bittiya Sanstha Ltd also went up by over 9 percent each. Radhi Bidyut Company Ltd, Central Finance Co Ltd and Sparsha Laghubitta Bittiya Sanstha Ltd were among other advances.

On the other hand, shares of Summit Laghubitta Bittiya Sanstha Ltd suffered the most. The scrip's price slumped over 7 percent. Secondly, Sindhu Bikash Bank Ltd tanked over 5 percent. Correspondingly, Ghalemdi Hydro Ltd, Himalayan Distillery Ltd and Mithila Laghubitta Bittiya Sanstha Ltd registered losses of over 4 percent each.

On the earnings front, Dibyashwari Hydropower Ltd published its third quarterly report on Tuesday. The hydropower company posted a net loss of Rs 20.62 million. Net loss in the corresponding quarter the previous year stood at Rs 19.91 million.

ARKS technical analysis indicates the market forming a small bullish candlestick on the daily timeframe as the Nepse continues to hover above 1,300 points mark. The psychological support at 1,300 points mark has still held ground making further downward movement less likely. However, for a substantial uptrend to follow, the equity index must breach 1,320 points resistance with noteworthy market volumes.

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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