Daily Market Commentary

Nepse ends session slightly lower after final hour recovery

Published On: June 30, 2021 07:00 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, June 30: The local bourse slid sharply in the morning with Nepse trading below 2,800 mark. A failed recovery attempt thereafter saw the index falter further reaching as low as 2,782. However, stocks found some ground in the second half of Wednesday’s session. A sharp recovery seen in finance and development bank stocks pushed the index close to its opening level. Consequently, Nepse finished the day down 4.13 points against the session earlier at 2,823.88. 

The day’s decline marks a third straight loss for the index as investors are yet to take notable long positions. Nonetheless, stocks, which have lost significant value in the past two weeks, staged a sharp recovery to recoup its prior day losses. However, turnover has continued to falter with the index registering a turnover of below Rs. 6 billion mark for the first time since mid-May. 

Sectors saw mixed performance. A significant rebound seen in finance and development bank stocks pushed the respective sub-indices higher by 5.80% and 3.40%, respectively. Manufacturing & Processing and ‘Others’ sub-indices also rose by almost 1%. Non-Life Insurance and Hydropower sub-indices ended marginally higher. Meanwhile, Investment sub-index dropped 1.20% followed my Microfinance sub-index which fell 0.93%. Trading, Life Insurance, Mutual Fund, and Banking sub-indices closed with modest loss. 

Nepal Insurance Company Ltd and NLG Insurance Company Ltd were traded the most with the stocks registering turnovers of Rs. 304 million and Rs. 217 million. National Hydropower Company Ltd and Nepal Reinsurance Company Ltd followed suit with turnovers of Rs. 187 million and Rs. 147 million. Jyoti Bikas Bank Ltd, Lumbini Bikas Bank Ltd and Nepal Infrastructure Bank Ltd were among other actively traded stocks.

Pokhara Finance Ltd, Central Finance Company Ltd, Nepal Finance Ltd, Multipurpose Finance Ltd and Progressive Finance Ltd led the gains with rallies of over 9% each. Best Finance Company Ltd, ICFC Finance Ltd, Karnali Bikas Bank Ltd and Shree Investment & Finance Co. Ltd’s shares also saw considerable strength as each scrip shot up by over 7%.

Hydroelectricity Investment & Development Company Ltd was the day’s laggard with the stock tanking 4.28%. Khani Khola Hydropower Co. Ltd and Ganapati Microfinance Bittiya Sanstha Ltd also tumbled more than 3%. Sabaiko Laghubitta Bittiya Sanstha Ltd, Soaltee Hotel Ltd, Himalaya Urja Bikas Company Ltd and NIC Asia Laghubitta Bittiya Sanstha Ltd also fell more than 2% on Wednesday.

As per the ARKS technical analysis, the index formed a hammer candlestick following a rebound from 2,780 mark. The candlestick also suggests bulls prevailing in the current juncture helping stocks recover from the day’s low. However, with volumes still on the lower side of the spectrum, further confirmation with a green candlestick on the following day can indicate possibility of a rebound. Psychological 2,800 mark still provides support for the equity market. 

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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