Daily Market Commentary

Nepse corrects, pulling most segments in negative territory

Published On: August 5, 2021 07:14 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, August 5: The Nepal Stock Exchange (Nepse) index opened in green but corrected firmly pulling the index back towards the opening level at around mid-day. The benchmark witnessed another advance but failed to hold ground in green as the market witnessed a gradual decline in the latter trading hours. At the close, Nepse fell 16 points to settle at 3,107.45.

After an advance over 3,100 mark, the index has corrected marginally reverting towards the psychological mark. Profit booking in most of the sectors coupled with cautious buying ahead of monetary policy announcement dragged the index slightly lower. Nonetheless, market participation has remained upbeat. Over Rs. 14 billion worth of equities changed hands.

Barring Development Bank sector, which rose 2.24%, all sectors ended the day in red. Hydropower segment witnessed massive selling pressure with the sub-index losing more than 2%. Investment, Hotels & Tourism, Trading and Manufacturing & Processing stocks lost more than 1% on average. All other segments ended the day marginally lower.

Hydropower scrips led the list of active stocks. Upper Tamakoshi Hydropower Ltd registered a turnover of Rs. 653 million, followed by Api Power Company Ltd which saw a turnover of Rs. 584 million. Arun Valley Hydropower Development Company Ltd and First Microfinance Laghubitta Bittiya Sanstha Ltd posted turnovers of Rs. 491 million and Rs. 317 million. Arun Kabeli Power Ltd, Jyoti Bikas Bank Ltd, Sanima Mai Hydropower Ltd and Hydroelectricity Investment & Development Company Ltd were among other heavily traded shares. 

Nepal Finance Ltd, Karnali Development Bank Ltd and Jeevan Bikas Laghubitta Bittiya Sanstha Ltd saw notable strength with each scrip rallying 10%. Union Life Insurance Company Ltd, First Microfinance Laghubitta Bittiya Sanstha Ltd and Janaki Finane Ltd rose 9.98%, 8.2% and 5.89%, respectively. Khanikhola Hydropower Co. Ltd, Saptakoshi Development Bank Ltd and Butwal Power Company Ltd were among other top gainers. 

Universal Power Company Ltd was the biggest percentage loser of the day with the energy scrip tanked 6.79%. Barun Hydropower Company Ltd, Ridi Hydropower Development Company Ltd, Shiva Shree Hydropower Ltd, United Modi Hydropower Ltd and Ghalemdi Hydro Ltd registered declines of over 5% each. Other energy stocks followed suit.

As per the ARKS technical analysis, the index formed a small bearish candlestick on the daily timeframe reflecting sellers’ dominance in the session. Flattening Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD), also suggests loss of momentum of late and possibility of a correction or consolidation. A breach of 3,100 mark can see the index test the support of 3,080 mark, with further support lying at the psychological 3,000 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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