Daily Market Commentary

Nepse extends correction with another 50-point drop

Published On: August 29, 2021 10:30 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, August 29: The Nepal Stock Exchange (Nepse) index rose in the morning on Sunday and traded above 3,100 mark briefly. However, the benchmark continued its downward momentum and pulled back slightly at mid-day. Further selling pressure in the latter trading hours saw the index tumble in the negative territory. At the close, Nepse lost 49.18 points to end at 3,044.87.

After a small recovery in Thursday’s session, the index fell around 50 points in the beginning of the week. The broad selling pressure resulted in most of the sectors closing firmly lower. Turnover, however, rose compared to the day earlier. Over Rs. 15 billion worth of equities changed hands. 

Barring Finance sector, all segments ended in negative territory. Finance sub-index rose 0.68%. On the other hand, Hydropower sub-group fell 2.42% followed by Microfinance segment which ended 1.96% lower. Heavyweight banks, insurance and all other sectors ended in negative territory. 

Arun Valley Hydropower Development Company Ltd was the most actively traded stock of the day. Over Rs. 1.3 billion worth of the scrip changed hands. Arun Kabeli Power Ltd, Jeevan Bikas Laghubitta Bittiya Sanstha Ltd, ICFC Finance Ltd and Himalayan Distillery Ltd were the other actively traded stocks.

Narayani Development Bank Ltd and Khani Khola Hydropower Company Ltd bucked the trend and jumped exactly 10% each. Arun Valley Hydropower Development Company Ltd, Janaki Finance Ltd and Civil Laghubitta Bittiya Sanstha Ltd climbed around 7% apiece. Mainly finance stocks led the list of advances. 

In contrast, Ru Ru Jalbidhyut Pariyojana Ltd plunged 10%, while Singati Hydro Energy Ltd dipped 7.35%. Gurkhas Finance Ltd, CEDB Hydropower Development Company Ltd and Barun Hydropower Co. Ltd lost more than 5%. Himal Power Partner Ltd, Union Hydropower Ltd and Liberty Energy Company Ltd were among other major laggards. 

In terms of ARKS technical analysis, the index formed a strong bearish candlestick reflecting sellers dominating the session. While some indecision was seen in the day earlier, Sunday’s correction points towards possibility of further correction with immediate support at 3,000 mark. Momentum indicators also suggest that buyers are yet to gain ground. Hence, a rebound from around 3,000 will signal change of short term trend. 

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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