Daily Market Commentary

Nepse ends mildly lower as BFIs slide

Published On: May 25, 2021 10:13 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, May 26: The equity market witnessed notable weakness in the morning with the benchmark Nepal Stock Exchange (Nepse) index sliding almost 20 points lower in the morning. A sharp recovery ensued before the index finally found some footing around the opening level in the afternoon. A final hour dip saw the benchmark register a 6.47 point’s loss to settle Tuesday’s trading at 2,816.60.

After rallying to a fresh all-time high in Monday’s trading, the equity market lost some steam to close session around 20 points off its intra-day high. The correction came on the back of massive profit taking in BFI sectors. Nonetheless, strength seen in hydropower and insurance sectors compensated for the financial sector losses. Volumes have also remained upbeat. The bourse saw another transaction of over Rs. 11 billion. 

Development Bank and Banking stocks came under notable pressure dipping 1.58% and 1.35%. ‘Others’ sub-index dropped 1.29%, while Investment segment average fell by 1.12%. Hotels & Tourism, Manufacturing & Processing and Finance sectors also ended in red. In contrast, Life Insurance and Hydropower sectors witnessed notable buying enthusiasm. Both sub-indices finished over 2% higher. Non-Life Insurance sub-index closely followed with a 1.76% jump. Trading, Mutual Fund and Microfinance sectors eked out modest gains. 

Shares of Arun Kabeli Power Ltd were traded the most. Over Rs. 338 million worth of the energy stocks changed hands. Asian Life Insurance Company Ltd and Hydroelectricity Investment and Development Company Ltd were also heavily traded, with the respective scrips registering turnovers of Rs. 330 million and Rs. 303 million. Surya Life Insurance Company Ltd, National Life Insurance Company Ltd and Gurans Life Insurance Company Ltd posted turnovers of Rs. 292 million, Rs. 279 million and RS. 262 million. 

Conversely, Multipurpose Finance Ltd led the list of major decliners. The finance stock fell 3.22%. Miteri Development Bank Ltd slumped 2.7%, while Nepal Finance Ltd fell 2.62%. Century Commercial Bank Ltd, Shine Resunga Development Bank Ltd and Hydroelectricity Investment and Development Company Ltd closed around 2.5% lower each. Besides, mainly bank, finance and development bank scrips struggled in the session.

As per the ARKS technical analysis, the index formed a second bearish spinning top candlestick on the daily timeframe reflecting indecisiveness prevailing of late. Technical indicators suggest that the current momentum still favors the bulls making more upside movement likely. However, some correction can also be expected following a rally of over 200 points in the month of May so far. A strong support lies 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)

Leave A Comment