Daily Market Commentary

Nepse ends last session of fiscal year on a positive note

Published On: July 15, 2021 07:30 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 15: Stocks opened Thursday’s session in green as the Nepal Stock Exchange (Nepse) index added 10 points in the pre-open session. Stocks saw some selling pressure in the morning but the bourse managed to hover more than 5 points higher. Following a sharp move up towards 2,890 level, the index saw another pullback. Eventually, Nepse ended the day 11.33 points higher at 2,883.38.

Despite ending the last month in red, the broader equity market managed to register a more than 100% gain in the past fiscal year. The bourse also managed to see substantial volumes as compared to the year earlier as the bull market has garnered enthusiasm from existing and new investors. Excess liquidity resulting from slowing down of economic activities amidst the pandemic was also one of the major impetus driving the equity market firmly higher. Looking ahead, liquidity and interest rate cues along with fourth quarter company financials will be crucial in determining the sentiment of the equity market in the beginning of the fiscal year 21/22.

A turnover of Rs. 8.14 billion was recorded in Thursday’s trading. Sectors ended mixed. Finance sub-index continued to rally closing more than 2.39% higher. Hydropower sector rose 1.98%, while Microfinance sub-group ended 0.89% higher. On the other hand, Hotels and Tourism segment dipped 1.43%. ‘Others’ sector lost 0.45%. All other sub-indices registered modest moves.

Gurkhas Finance Company Ltd and NIC Asia Bank Ltd were the most actively traded scrips of the session. The formed saw a transaction of over Rs. 367 million, while the latter logged in a turnover of more than Rs. 331 million. Manjushree Finance Ltd, Nepal Life Insurance Company Ltd, National Hydropower Company Ltd, Ngadi Group Power Ltd and Nepal Reinsurance Company Ltd were the other top turnover stocks.

On the gainers’ front, Ngadi Group Power Ltd saw notable strength and rallied 9.40%. Rairang Hydropower Development Company Ltd also jumped over 8.91%. Ganapati Microfinance Bittiya Sanstha Ltd, Manjushree Finance Ltd and Liberty Energy Company Ltd shot up by more than 7% apiece. Besides, mostly hydropower and finance stocks registered notable gains.

Conversely, Civil Laghubitta Bittiya Sanstha Ltd was the biggest losing scrip of the day. The micro-sector lender saw its share price close almost 3% lower. Oriental Hotels Ltd and Soaltee Hotel Ltd lost more than 2% on their respective prices. Unilever Nepal Ltd, Mahalaxmi Bikas Bank Ltd and Saptakoshi Development Bank Ltd were among other major losers.

The equity market formed a small doji candlestick on the daily timeframe, amidst further indecision. However, a higher close suggests slight positive bias in the current market sentiment. Technical indicators are also tipping in favor of bulls, but the momentum of late is weak. The market has maintained its footing above the 50 EMA line, which is acting as a dynamic support for the market. 2,800-2,900 zone can be taken as a consolidation zone making a breakout beyond the respective range pivotal in determining Nepse’s course.

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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