Daily Market Commentary

Nepse corrects marginally after a two-day advance

Published On: February 3, 2021 06:58 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Feb 3: Strength from the prior trading session carried over to Wednesday as stocks traded firmly higher in the morning. Nepse traded over 2,500 briefly in the morning, touching the uncharted mark for the first time in history. Nonetheless, some selling pressure was evident thereafter. After pulling back below 2,500 level, the index fell further towards the close. At Wednesday’s close, Nepse ended at 2,466.92 – down a modest 6.81 points against the session earlier.

The equity index saw some volatility in the week after a whole month of steady advance in the month of January. Hence, both buyers and sellers seemed active in the recent sessions. On Wednesday, the index lost some footing after the broader index pulled back amidst active profit booking in microfinance and insurance stocks. The bourse also witnessed heavy transactions on the day. Over Rs. 9.53 million worth of securities were traded in the session.

While most of the sectors mirrored the broader market, few segments bucked the trend. The hydropower sector jumped 1.05%. Mutual Fund, Banking and Microfinance sub-indices also ended in green. On the other hand, Finance, Trading and Manufacturing & Processing sectors struggled and fell around 1.6% each. All other sectors ended in negative territory.

Global IME Bank Ltd was the most actively traded stock with a turnover of over Rs. 608 million. Nepal Reinsurance Company Ltd, Arun Kabeli Power Ltd, and Nepal Telecom Ltd followed suit with turnovers of Rs. 352 million, Rs. 346 million and Rs. 325 million. Nepal Bank Ltd, Nepal Life Insurance Company Ltd, Shikhar Insurance Company Ltd were among other heavily traded stocks.

Among gainers, Swabhimaan Laghubitta Bittiya Sanstha Ltd, Janautthan Samudayic Laghubitta Bittiya Sanstha Ltd, Unnati Sahakarya Laghubitta Bittiya Sanstha Ltd and Mahuli Samudayik Laghubitta Bittiya Sanstha Ltd remained locked in the positive circuit of 10%. Arun Kabeli Power Ltd rose 7.21%, while General Insurance Company Ltd and Sanima Mai Hydropower Ltd jumped over 5%.

Pokhara Finance Ltd and Narayani Development Bank Ltd, on the other hand, came under significant pressure with declines of 7.88% and 4.39%. Multi-Purpose Finance Ltd, Progressive Finance Ltd and United Modi Hydropower Ltd fell 3.86%, 3.57% and 3.45%. Himalayan General Insurance Ltd, Laxmi Laghubitta Bittiya Sanstha Ltd and Nepal Credit and Commerce Bank Ltd also closed more than 3% lower.

As per the ARKS technical analysis, the index formed a small bearish candlestick reflecting some profit booking in the equity market. Momentum indicators also suggest that buyers are dominating the market in the present context. Further retracement can see the index test the support at the recent low of 2,370 mark. On the other hand, 2,500 level can at as a resistance to the Nepse index, a breach of which is crucial for the market to stretch its uptrend further.

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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