Daily Market Commentary

Nepse closes flat as sectors end mixed

Published On: June 8, 2021 05:24 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, June 7: The benchmark equity index opened firmly higher but pulled back towards the opening level at mid-day on Monday. Retracement seen in heavyweight banks dragged the Nepse index towards negative territory in the afternoon but losses remained modest. Stocks found some footing at the end of the trading session with Nepse finishing session essentially flat at 2,906.70 – down a modest 0.21 points against session earlier. 

After ending three sessions in green, the stock market lost some steam on Monday as profit taking prevailed in the heavyweight banking stocks pulling the sub-index lower. However, gains came in other sectors, which helped the market hold its ground above 2,900 mark. Market activity dropped slightly against the day earlier. Nonetheless, over Rs. 15.82 billion worth of shares changed hands. 

Finance and Development Bank sectors were the major winners of the session with the respective sub-indices ending 8.27% and 6.27% higher. Hydropower sub-index shot up by 3.23%. Mutual Fund, Non-Life Insurance, ‘Others’ and Life Insurance sectors ended slightly higher. On the other hand, Trading segment fell sharply and dipped 2.21%. Banking stocks also corrected 1.61% on average. Hotels and Tourism, Microfinance, Manufacturing & Processing and Investment sub-indices also ended the day lower. 

Shares of Nepal Reinsurance Company Ltd were traded the most with the scrip logging in a transaction of over Rs. 621 million. Nepal Infrastructure Bank Ltd and National Hydropower Company Ltd followed suit with turnovers of Rs. 466 million and Rs. 436 million. Lumbini Bikas Bank Ltd, Kumari Bank Ltd, Muktinath Bikas Bank Ltd and Jyoti Bikas Bank Ltd were among other actively traded stocks. 

Mainly finance companies dominated the list of gainers. Pokhara Finance Ltd, Central Finance Company Ltd and ICFC Finance Ltd surged 10% each. Kamana Sewa Bikas Bank Ltd, Shree Investment and Finance Co. Ltd and Goodwill Finance Company Ltd rose more than 9%. Besides, most of the finance stocks rallied around 9%. Hydropower and Development Bank stocks also saw strength.

Laxmi Bank Ltd was the major loser as the banking scrip corrected 3.58%. Narayani Development Bank Ltd and Sunrise Bank Ltd’s shares, similarly, came under pressure and dropped 2.90% and 2.71%, respectively. Further, Kumari Bank Ltd, Civil Bank Ltd, Citizens Bank Ltd and Salt Trading Corporation posted declines of over 2% each.

The Nepse index, as per the ARKS technical analysis, formed a small bearish candlestick suggesting loss of momentum in the equity market. Nonetheless, a series of above average volumes suggest that the overall uptrend will likely stretch further despite minor corrections. Technical indicators also reflect strength and some more room for gains ahead. A support for the market lies at 2,750 mark. 

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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