Daily Market Commentary

Nepse drops 32 points as investors wary ahead of monetary policy review

Published On: November 23, 2021 07:30 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Sept 23: The Nepal Stock Exchange (Nepse) index fell towards 2,750 level at mid-day and plateaued till mid-session. Further selling pressure in the latter trading hours pushed the benchmark firmly lower. At the close, Nepse settled at 2,733.31 – down 32.31 points against the session earlier.

Despite the index’s attempt of a recovery on Monday, the index stretched its downside move giving up most of the gains from prior week. Turnover improved against the session earlier, but volumes remained modest. Only Rs. 4.17 billion worth of equities changed hands.

All sectors came under pressure barring ‘Others’ segment which rose around 1%. Finance, Hotels & Tourism, Hydropower and Development bank sub-indices fell 3.4%, 2.7%, 2.34% and 2.23%. Heavyweight banks dropped 0.94%, while others saw firm declines.

Nepal Telecom Ltd continued to trade heavily with its turnover accounting for 10% of total traded volume. The telecom provider saw a transaction of over Rs. 415 million. National Hydropower Company Ltd, Mahalaxmi Bikas Bank Ltd and Api Power Company Ltd followed suit with turnovers of Rs. 122 million, Rs. 104 million and Rs. 103 million. Arun Kabeli Power Ltd, Himal Dolakha Hydropower Company Ltd and Nabil Bank Ltd were among other actively traded stocks.

Manushi Laghubitta Bittiya Sanstha Ltd shot up by 10% stretching its post IPO rally. Nepal Telecom Ltd and Ganapati Laghubitta Bittiya Sanstha Ltd climbed over 2% apiece. Samudayik Laghubitta Bittiya Sanstha Ltd, Forward Laghubitta Bittiya Sanstha Ltd and Sana Kisan Laghubitta Bittiya Sanstha Ltd were the other major winners.

ICFC Finance Ltd and Narayani Development Bank Ltd were the major laggards dropping over 5% apiece. Goodwill Finance Company Ltd, Singati Hydro Energy Ltd and Multipurpose Finance Ltd saw declines of more than 4%.

As per the ARKS technical analysis, the index formed a bearish candlestick breaking its minor support of 2,750 mark. With indecision still prevailing and amidst lack of any clear strength in the equity market, a test of 2,680 support is likely. However, any strong selling momentum is yet to be seen. On the other hand, a breakout above 2,850 mark will signal resumption of the recovery in the equity market.

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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