Daily Market Commentary

Nepse ends slightly higher after a 100-point rebound

Published On: September 21, 2021 07:30 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Sept 21: Stocks tanked sharply in early trading on Tuesday as the benchmark Nepse index dipped over 80 points in the morning to reach as low as 2,615 mark. However, a sharp rally pushed the broad based index around 63 points higher at mid-day. The bourse saw volatile trading thereafter, but managed to hold its ground in positive territory in the afternoon. At the close Nepse registered a 13.83-point gain to close at 2,712.07.

Some buying pressure was seen after the morning dip, with traders taking heavy buying positions at relatively lower prices. Anticipating a recovery, investors helped the index close above the opening level, but a notable shift in sentiment is yet to be seen. Participation also fell on the day, with a turnover of less than Rs. 7.5 billion.

Most of the sectors ended in green, while few ended lower. Trading sub-index tumbled 1.61%. Finance, Manufacturing & Processing, and Mutual Fund sectors also inched lower. On the other hand, Hotels & Tourism sector rose 2.38% followed by Investment and Life Insurance stocks which jumped 1.37% and 1.33%. Besides, all sectors ended slightly in green.

Arun Valley Hydropower Development Company Ltd’s shares were traded the most. Over Rs. 254 million worth of the energy stock changed hands. Nabil Bank Ltd, Nepal Infrastructure Bank Ltd and Himalayan Distillery Ltd followed suit with turnovers of over Rs. 200 million. Api Power Company Ltd, United Modi Hydropower Ltd and Nepal Life Insurance Company Ltd were also heavily traded on the day.

Manakamana Smart Laghubitta Bittiya Sanstha Ltd continued to lead the list of gainers. The microfinance stock rose 10%. Ru Ru Jalbidhyut Pariyojana Ltd and Nepal Infrastructure Bank Ltd jumped around 5% apiece. Life Insurance Corporation Nepal, Mahuli Samudayik Laghubitta Bittiya Sanstha Ltd, Soaltee Hotel Ltd and Api Power Company Ltd also saw strength and advanced more than 3% apiec.e

On the other hand, Excel Development Bank Ltd suffered the most and plunged 3.42%. Janaki Finance Ltd and Mountain Energy Nepal Ltd lost around 3% apiece. Support Laghubitta Bittiya Sanstha Ltd, Nepal Hydro Developers Ltd and Gurkhas Finance Ltd were among other major decliners with losses of over 2% apiece.

On the technical front, the index formed a small bullish candlestick with long wicks on either side suggesting notable volatility in the equity market. The index found support from 2,600 mark in intraday trading, while 2,700 line support is still intact in terms of close. Momentum indicators indicate short term downward move in action. However, Relative Strength Index (RSI) has formed a slight bullish divergencewhich indicates possibility of a rebound given a follow up green candle is formed on Wednesday with volume.

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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