Daily Market Commentary

Nepse climbs higher as finance and development bank surge offset energy sector’s dip

Published On: August 10, 2021 07:18 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, August 10: The Nepal Stock Exchange (Nepse) index traded marginally higher in Tuesday morning and hovered around 3,125 mark for most of the beginning trading hour. However, stocks saw steady advance after mid-day with the Nepse rallying as much as 55 points. At the close, Nepse stood at 3,161.56 – a jump of more than 51.97 points compared to the session earlier.

A consolidation around 3,100 mark was followed by a firmly upbeat session on Tuesday, with the benchmark gaining more than 50 points. The upward move was also accompanied by a massive turnover of almost Rs. 18 billion.

Barring, Trading, Hotels & Tourism and Hydropower sub-indices all sectors ended the day in positive territory. Development Bank and Finance sub-indices rallied sharply with the respective sub-indices registering gains of 8.07% and 6.78%. Banking, Investment, Microfinance and Life Insurance sectors also rose more than 1% each. All other segments ended in positive territory.

Shares of Upper Tamakoshi Hydropower Ltd and Arun Valley Hydropower Development Company Ltd were traded the most with respective turnovers of Rs. 896 million and Rs. 531 million. Api Power Company Ltd, Jyoti Bikas Bank Ltd and Arun Kabeli Power Ltd followed suit with turnovers of around half a billion Rs. each.

Microfinance and Development Bank stocks led the list of major gainers with 10 stocks from the two sub-groups remaining locked in the positive circuit level of 10%. Besides, few insurance, microfinance and bank stocks saw upbeat movement in the day.

On the other hand, hydropower stocks dominated the list of losing scrips. Sanjen Jalavidhyut Company Ltd, Synergy Power Development Ltd and Khani Khola Hydropower Co. Ltd fell the most with declines of 5.16%, 4.71% and 4.25%, respectively. Panchakanya Mai Hydropower Ltd, Ghalemdi Hydro Ltd and Arun Valley Hydropower Development Co. Ltd, tanked around 4% apiece. Other energy stocks followed suit.

On the technical front, the equity index formed a strong bullish candlestick suggesting a breakout from the consolidation range around 3,100. After a slight loss of momentum as reflected by technical indicators, the sentiment has now shifted in favor of bulls. While some brief correction is on the card, the overall near and medium term trend remains bullish. 3,100 mark can now be taken as a strong support, a breach of which calls for a short term dip in the equity market.

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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