Daily market commentary

Nepse corrects firmly after banking stocks struggle

Published On: February 22, 2021 07:59 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Feb 22: The Nepalese equity market opened Monday’s session in green but gave up morning gains within the first trading hour. Stocks remained under pressure thereafter and fell more than 20 points at mid-session. Further selling pressure towards the closing hours saw the benchmark close with a loss of 32.67 points at 2,607.67.

A significant correction on banking stocks pulled the broader index lower ending its five day gaining streak. Similarly, most of the sectors came under pressure during the day, which also fueled Nepse’s decline. Total turnover stood at Rs. 8.41 billion.

Trading sector was the day’s major loser. The group’s sub-index tumbled 3.02%. Banking sector fell 2.72% followed by Development Bank stocks, which lost 2.35% on average. Life Insurance and Microfinance sub-indices fell 1.94% and 1.28% respectively. All other sectors closed in red ,barring Hydropower and ‘Others’ groups which added 2.26% and 1.29%.

Shares of NIC Asia Bank Ltd were traded the most with a turnover of Rs. 382 million. Nepal Infrastructure Development Bank Ltd and Nirdhan Utthan Laghubitta Bittiya Sanstha Ltd posted turnovers of Rs. 321 million and Rs. 308 million. Shikhar Insurance Company Ltd, Nepal Life Insurance Company Ltd, Global IME Bank Ltd, Nepal Bank Ltd and Nabil Bank Ltd were among other heavily traded stocks.

Mainly energy stocks led the list of winners. Ankhu Khola Jalvidhyut Company Ltd and Nepal Infrastructure Development Bank Ltd surged 10% each. Nepal Hydro Developers Ltd and Upper Tamakoshi Hydropower Ltd also remained locked in the positive circuit limit of 10%. Chandragiri Hills Ltd, Shivashree Hydropower Ltd and Sunrise First Mutual Fund also registered gains of over 9% each.

On the other hand, Century Commercial Bank Ltd and Civil Bank Ltd suffered the most as the stocks dropped 5.52% and 5.32%, respectively. Mega Bank Ltd and Nabil Equity Fund also dropped by over 5%. Machhapuchhre Bank Ltd, Sunrise Bank Ltd and Unnati Sahakarya Laghubitta Bittiya Sanstha Ltd were the other major laggards with declines of over 4% each.

As per the ARKS technical analysis, the market formed a strong bearish candlestick erasing almost 3 days of gains. Hence, following a loss of momentum, selling pressure was evident on Monday. With profit booking seen on heavyweight bank stocks, the market will like stretch its correction onto the coming sessions. A break below 2,600 can signal a possibility of deeper retracement. However, the overall trend in the market favors buyers.

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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