Daily market commentary

Nepse ekes out marginal gains in volatile trading

Published On: January 22, 2020 08:37 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Stocks opened on a positive note on Tuesday as the major average saw a steady rise in the first trading hour. The Nepal Stock Exchange (Nepse) index added 13 points in the morning session before succumbing to selling pressure in th e afternoon. After trading roughly 7 points lower at mid-session, Nepse staged a recovery toward the closed ended the day 3.26 points higher at 1,320.47 points.

The index gyrated between gains and losses in the session amid tussle between buyers and sellers. While some investors continued to book profits, others took Monday's retracement as a buying opportunity expecting market to further stretch its advance. On an upbeat note, market participation is yet to subside. Over Rs 1.5 billion worth of securities changed hands on the day.

Sectoral sub-indices witnessed mixed performance on the day. Non-life Insurance and Trading sectors saw strength with their respective sub-indices going up by over 1%. Life Insurance sub-index also climbed up by 0.88%. Manufacturing & Processing, Banking and Hotels sectors also posted marginal gains. On the other hand, losses came mainly from Mutual Fund and 'Others' sectors as their corresponding sub-indices were down by over 1% each. Development Bank, Finance, Microfinance and Hydropower sub-indices also posted marginal gains.

In terms of market activity, Rs 244 million worth of units of Himalayan Bank Ltd Promoter Share were traded on the day. Himalayan Distillery Ltd, meanwhile, logged total turnover of Rs 105 million. NIC Asia Bank Ltd, Nepal Life Insurance Company Ltd and Shivam Cements Ltd posted turnovers of Rs 94 million, Rs 62 million and Rs 57 million, respectively.

Share prices of three companies neared the upper circuit on the day. Gurans Life Insurance Company Ltd, Global IME Bank Ltd and Panchthar Power Company Ltd saw their share prices surge by over 9% each. Furthermore, share prices of Sparsha Laghubitta Bittiya Sanstha Ltd, Samudayik Laghubitta Bittiya Sanstha Ltd and Kalika Power Company Ltd surged by over 5% each. Best Finance Company, Lumbini General Insurance Co Ltd and IME General Insurance Ltd were among other major advances of the day.

NIC Asia Growth Fund, on the other hand, logged the biggest loss of the day as its unit price tumbled by 6.48%. Meanwhile, ICFC Finance Ltd saw its unit price go down by 6.07%, while Mahuli Samudayik Laghubitta Bittiya Sanstha Ltd, Synergy Power Development Ltd, Universal Power Company Ltd and Dibyashwori Hydropower Ltd registered posted decline of over 5% each. Other hydropower stocks followed suit.

With the end of the second quarter, banks have begun publishing their financial results for the first half of the current fiscal year. On Tuesday, NIC Asia Bank Ltd reported a 33% year-on-year growth in its net profit to Rs 2.01 billion.

As per ARKS technical analysis, the market formed a small bullish spinning top candlestick reflecting lack of conviction in the market following previous day's retracement. Technical indicators, meanwhile, show the market losing steam slightly in the present context. Nonetheless, the psychological support has still held ground firmly from which the market might stage a further rebound. Hence, positive movement in the following session can validate another bounce back.

This column is produced by ARKS Capital Advisors Ltd
(Views expressed are those of the producer and do not necessarily reflect those of this publication)

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