Daily Commentary

Nepse ends trading week on a positive note

Published On: July 30, 2020 08:00 PM NPT

KATHMANDU, July 30: Thursday’s trading saw stocks open in green as the Nepal Stock Exchange (Nepse) rose about 6 points in the morning. The index trimmed its early gains to trade in negative territory at mid-session. Thereafter, the bourse staged a recovery from around 1,420-point mark to end the day with a gain of 7.53 points at 1,439.06 points.

Following three consecutive sessions of losses, the index snapped its losing run with a moderate advance in the last trading day of the week. All sectors recouped the previous day gains marginally contributing to Nepse’s gain. Turnover dropped in comparison to Wednesday’s session. Nonetheless, turnover remained above par with over Rs 1.32 billion worth of shares being traded on the day.

All sectors recouped previous day losses marginally. Manufacturing & Processing sector led the gains with the sub-index adding 1 percent. Finance and Hotels segment also saw strength as the respective sub-indices closed over 0.9 percent higher. Heavyweight banks also closed higher despite selling pressure seen in the morning. The sub-index rose 0.41 percent. All other sectors ended with modest gains.

Among actives, shares of Nepal Reinsurance Company Ltd saw heavy transactions. The reinsurance scrip posted a turnover of Rs 229 million. Next, Nepal Life Insurance Company Ltd registered a turnover of almost Rs 90 million. NIC Asia Bank Ltd and Shikhar Insurance Company Ltd’s shares were also traded actively with transactions of Rs 50 million each.

Mainly cheap hydropower stocks saw notable upward movement. Khanikhola Hydropower Company Ltd posted the biggest percentage gain of the day as its share price hit the upper circuit of positive 10 percent. Arambha Chautari Laghubitta Bittiya Sanstha Ltd also shot up by almost 10 percent. Other energy stocks followed the suit. Panchakanya Mai Hydropower Company Ltd, National Hydropower Company Ltd, Himalaya Urja Bikas Company Ltd, Rairang Hydropower Development Company Ltd and Ankhukhola Hydropower Company Ltd’s shares also surged over 9 percent apiece.

On the other hand, shares of Ghodighoda Laghubitta Bittiya Sanstha Ltd suffered the most and fell almost 10 percent. Gurans Laghubitta Bittiya Sanstha Ltd, subsequently, tumbled over 5 percent. Progressive Finance Ltd and Multipurpose Finance Company Ltd followed suit with losses of over 3 percent each. IME General Insurance Company Ltd, Support Laghubitta Bittiya Sanstha Ltd and Goodwill Finance Company Ltd were among other major losing scrips.

On the technical front, the market formed a small bullish spinning top candlestick reflecting indecision as no significant buying or selling pressure was observed in the day. Hence, the momentum has shifted more towards the neutral side as the index failed to break support at 1,417 points despite three straight days of losses. Given that the index is able to rebound from the support zone along with a surge in the volume, the market can see more upward movement. On the other hand, a dip and close below 1,417 points will point to further drop in the index. Both Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) reflect average sentiment in 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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