Daily market commentary

Nepse corrects 18 points after sustained January rally

Published On: January 26, 2021 06:55 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 26: The Nepal Stock Exchange (Nepse) opened 20 points higher but witnessed a sharp correction in the shortly thereafter. The benchmark quickly recovered its losses in the morning and traded in green at mid-day. The index swung between gains and losses in the latter trading hours finally ending 17.79 points lower at 2,423.09.

After rallying more than 300 points since the beginning of 2021, the index witnessed some correction on the back of profit booking in majority of the sectors. Hence, the momentum eased off slightly in Tuesday’s trading. Though some correction can be expected in the coming sessions, the uptrend still has some legs for upward movement. Over Rs. 8.28 billion worth of securities changed hands on Tuesday.

Out of the composite sectors, only Hotels and Finance sub-groups ended in positive territory. The respective sub-indices shot up by 2.68% and 1.12%. Trading sub-index, on the other hand, fell the most with a decline of 3.10%. Microfinance, ‘Others’, Hydropower and Development Bank indices lost more than 1%. All other sectors saw minor losses in the day.

In terms of active stocks, Nepal Life Insurance Company Ltd’s shares were traded the most. Over Rs. 1.45 billion worth of the stock changed hands. Nepal Bank Ltd followed suit with turnover of Rs. 535 million. Shikhar Insurance Company Ltd, Nepal Reinsurance Company Ltd and Nepal Telecom Ltd registered turnovers of Rs. 231 million, Rs. 200 million and Rs. 164 million. Citizen Investment Trust, Nabil Bank Ltd and Sunrise Bank Ltd were among other heavily traded shares.

Gurans Laghubitta Bittiya Sanstha Ltd, Prabhu Life Insurance Ltd and United Finance Ltd rallied to hit the upper circuit limit of 10%. Pokhara Finance Ltd and Oriental Hotels Ltd also saw notable strength and rallied 8.36% and 7.03%. Bottlers Nepal Terai Ltd, Nepal Bank Ltd and Shree Investment Finance Co. Ltd rose more than 6%.

Shiva Shree Hydropower Ltd, in contrast, suffered a loss of 4.95%. Progressive Finance Ltd, Rastriya Beema Company Ltd and Sanjen Jalavidhut Company Ltd followed suit with declines of over 4% each. Other major laggards for the day were Rasuwagadhi Hydropower Ltd, Panchakanya Mai Hydropower Ltd, RMDC Laghubitta Bittiya Sanstha Ltd and Multipurpose Finance Ltd.

The equity index formed a bearish candlestick on the daily timeframe reflecting sellers dominance on Tuesday. ARKS technical indicators also reflect slight loss of momentum. However, given the index holds ground above 2,400 mark, the short term uptrend will still remain intact. Besides, a notable correction can see the index test the psychological mark of 2,300 level. A rebound with volume can also provide opportunities to go long.

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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