Daily Market Commentary

Nepse ends lower but finds support at 2,600

Published On: September 28, 2021 07:08 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Sept 27: The Nepal Stock Exchange (Nepse) index fell around 40 points in the morning before climbing back in positive territory within the first trading hour. However, stocks continued its downfall in the latter trading hours. A steady decline saw the index reach almost 2,600 mark before a small recovery helped the benchmark close at 2,615.40 – down 70.01 points against the session earlier.

The index ended in red for a third consecutive session reflecting weakness in the capital market. Investors have remained reluctant to take major buying positions in higher prices, keeping the market from making upside moves. Turnover has also remained in the lower end of the spectrum with another below par turnover of Rs. 5.75 billion.

Finance stocks led the list of losers with the respective sub-index plunging 7.37%. Hydropower and Investment sub-indices followed suit with losses of 3.93% and 3.15%. All other sectors ended firmly lower. Heavyweight banks dropped 1.89%.

Kumari Bank Ltd was traded the most after the bank announced its dividend for the year. Its board has declared 6% bonus shares and 2.67% cash dividend. Himalayan Distillery Ltd and National Hydropower Company Ltd followed suit with turnovers of Rs. 174 million and Rs. 155 million. ICFC Finance Ltd, NIC Asia Bank Ltd and Nepal Bank Ltd were also actively traded on the day.

Manakama Smart Laghubitta Bittiya Sanstha Ltd and Mailung Khola Jal Vidhyut Company Ltd continued its rally with both scrips shooting up by 10% each. Mega Bank Ltd, Bottlers Nepal Ltd, Oriental Hotels Ltd and Vijay Laghubitta Bittiya Sanstha Ltd ended slightly in green.

On the other hand, energy stocks suffered with Himal Power Partner Ltd, Nepal Hydro Developers Ltd, and Joshi Hydropower Development Company Ltd dipping to hit the lower circuit of negative 10%. Gurkhas Finance Ltd,Shree Investment & Finance Company Ltd, Shiva Shree Hydropower Ltd and Samriddhi Finance Company Ltd and Ghalemdi Hydro Ltd also fell around 9% each.

As per the ARKS technical analysis, the index formed a strong bearish candlestick reflecting possibility of further correction.Technical indicators also suggest bearish sentiment still in action. However, 2600 support has held ground which makes a rebound appropriate for buying entry. A recovery above 2,800 mark can see the index resume its upward move on a sustainable manner.

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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