Weekly Market Commentary

Nepse closes week higher after two-week decline

Published On: May 7, 2021 07:55 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, May 7: The equity market staged a notable recovery on the first trading day of the week. The Nepal Stock Exchange (Nepse) index shot up by more than 54 points on Sunday. Stocks pared some of the gains on Monday with the market shedding 12.36 points in the session. After a marginal advance of 1.94 points on Tuesday, stocks continued to see modest movements in the latter half of the week. The benchmark fell 5.09 points on Wednesday, followed by a 12.47-point dip on Thursday. Despite recent losses, the equity market managed to close the review period with a 26.02 points or 1% gain at 2,637.13.

The selling pressure witnessed in the prior weeks has withered as the stock market witnessed active participation despite the lockdown in effect. Further, strength seen in some of the sectors helped the market trade in positive territory in the week. Total turnover also improved compared to the prior week. The exchange saw a total turnover of almost Rs. 34 billion against Rs. 27 billion in the week earlier.

Class ‘A’ stocks moved in tandem with the broader market with the Sensitive index adding 0.86%. In terms of sectoral performance, most composite groups ended in positive territory while only few segments landed in red. Microfinance stocks were the week’s leader with the respective sub-index surging 4.67%. Trading & Non-Life Insurance segments also rose 2.75% and 1.65%, respectively. Finance, Hydropower, Investment and Life Insurance sub-groups closed over 1% higher. Banking and ‘Others’ index edged slightly higher. Development Bank, Hotels and Tourism, Manufacturing & Processing and Mutual Fund sub-indices saw minimal losses.

In terms of ARKS weekly technical analysis, the index formed a small green spinning top candlestick suggesting slightly neutral to bullish sentiment in the week. The range-bound movement also reflects equities trying to consolidate after two weeks of deep correction. Though some correction can be expected in the coming week, the overall medium-term uptrend has still held ground. Traders and investors should carefully monitor the index around 2,600 marks before taking any major positions towards either side.

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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