Daily market Commentary

Nepse falters as investors defensive ahead of holiday season

Published On: September 27, 2021 09:01 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Sept 27: The Nepal Stock Exchange (Nepse) index opened higher but failed to sustain gains with the benchmark losing 20 points within the first few minutes of trading. The index climbed in positive territory briefly thereafter. However, further selling pressure in the latter trading hours saw the Nepalese equity index close with a loss of 61.27 points at 2,758.48.

After recovering from intraday low of around 2600 a couple of sessions earlier, the index resumed its downward move amidst lack of any major buying enthusiasm. Turnover has also continued to drop ahead of the festive season. Daily turnover stood below par at Rs. 6.5 billion on Sunday. While few banks have kept the drop in check, dips seen in volatile sectors have continued to drag the market lower. 

All sectors, barring Mutual Fund groups, ended in negative territory. Finance sub-index was hit the most, closing almost 6% lower. Hydropower and Investment sectors followed suit with losses of over 3% apiece. Besides, other sectors also saw weakness closing the day firmly lower. Heavyweight banks dipped 0.93%.

Arun Valley Hydropower Development Co. Ltd was traded the most ahead of its book closure for 10% bonus shares. Over Rs. 340 million worth of the script changed hands. Next, Nepal Bank Ltd posted a turnover of Rs. 213 million. Kamana Sewa Bikas Bank Ltd posted a turnover of Rs. 206 million after the development bank announced an 18.5% stock dividend to its shareholders on Friday. National Hydropower Company Ltd, Mega Bank Ltd and Citizens Bank International Ltd were among other active stocks. 

Manakama Smart Laghubitta Bittiya Sanstha, among gainers, rallied the most, closing at 10% upper circuit limit. Mailung Khola Jal Vidhyut Company Ltd also shot up by 6.03%. Kamana Sewa Bikas Bank Ltd, Unilever Nepal Ltd and Mega Bank Ltd ended slightly in green. 

ICFC Finance Ltd, on the other hand, came under notable pressure plunging 8.98%. Ghalemdi Hydro Ltd and Multipurpose Finance Company Ltd also lost around 8% apiece. Best Finance Company Ltd, Mountain Hydro Nepal Ltd, Goodwill Finance Company Ltd and Singati Hydro Energy Ltd posted declines of over 7% each. 

As per the ARKS technical analysis, the equity index formed a strong bearish candlestick truncating the recent recovery. Hence, bulls are yet to gain control of the equity market. Besides, index faltering back below 2,800 mark indicates short term bearish momentum with immediate support at 2,700. A rebound from the respective level with increase in volume can provide buying opportunities.

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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