Daily Market Commentary

Nepse ends flat, energy stocks rally

Published On: May 12, 2021 07:30 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, May 12: After opening more than 10 points higher, a correction in the beginning trading hour pushed the Nepal Stock Exchange(Nepse) index slightly below the opening level at mid-day. Stocks recovered in the afternoon and hovered around the opening level in the latter part of the session. At the close, Nepse ended little changed with a gain of 0.56 points at 2,673.88.

After gains in two consecutive days, the buying pressure eased off on Wednesday as Nepse remained confined within a narrow range throughout the trading session. Both buyers and sellers refrained from taking heavy positions. Turnover also fell marginally. Rs. 5.32 worth of securities changed hands on the day.

Sectors ended mixed. The manufacturing & Processing sub-index turned in the best performance of the day and rose 1.71%. Hydropower and Finance stocks also saw the strength and rose more than 1% on average. Investment, Mutual Fund, Non-Life Insurance and Development Bank sectors eked out marginal gains. On the other hand, the Trading sector suffered the most with a 1% dip. ‘Others’ index closely followed with a 0.92% fall. Life Insurance, Microfinance, Hotels, and Tourism Index and Banking sub-indices ended with modest declines.

Shares of Nepal Reinsurance Company Ltd continued to trade actively. Over Rs. 351 million worth of the reinsurer’s shares changed hands. Hydroelectricity Investment and Development Company Ltd and Api Power Company Ltd were the other actives with turnovers of Rs. 269 million and Rs. 148 million. Other heavily traded stocks of the day were Shivam Cements Ltd, Nepal Credit and Commerce Bank Ltd, NRN Infrastructure and Development Ltd, and Himal Dolakha Hydropower Company Ltd.

Narayani Development Bank Ltd, Bottlers Nepal Terai Ltd and Ankhu Khola Jalvidhyut Company Ltd were the biggest percentage gainers of the session with each scrip surging to hit the upper circuit limit of 10%. Bishal Bazar Company Ltd, Ru Ru Jalbidhyut Pariyojana Ltd, and Samata Laghubitta Bittiya Sanstha Ltd also rallied almost 10%. Besides, mainly hydropower stocks dominated the list of the major advances.

On the other hand, Salt Trading Corporation and Sanima General Insurance Ltd corrected more than 2% each. Furthermore, Suryodaya Laghubitta Bittiya Sanstha Ltd and Kisan Laghubitta Bittiya Sanstha Ltd fell over 1.8% each. Similarly, other microfinance stocks came under pressure.

As per the ARKS technical analysis, the index formed a small bearish candlestick with the market closing below the opening level. The small candlestick indicates a lack of major buying or selling momentum. Lower volumes further validate the uncertainty prevailing in the current juncture. Technical indicators suggest the possibility of a more upward move in the shorter term. 2,600 line still acts as major support for the market, while an immediate resistance lies at 2,700 psychological mark. The breakout above 2,700 with volume might see the index make a fresh high above the previous high at 2,735 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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