Daily Market Commentary

Nepse finds ground partially erasing previous day losses

Published On: July 14, 2021 05:40 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 14: The equity market extended its losses to start Tuesday’s session in red. After dipping around 5 points, The Nepal Stock Exchange (Nepse) index staged a rebound crossing 2,880 mark within the first trading hour. Nonetheless, stocks corrected the rafter but maintained positive bias throughout the latter trading hours. At the close, Nepse settled with a gain of 16.34 points at 2,871.03.

While the market witnessed notable weakness on Monday, amidst the decision of the court to reinstate the parliament, stocks found ground on Tuesday as investors looked past the political volatility. Consequently, Nepse closed the day higher with mainly finance stocks taking the lead. Turnover, however, fell as only Rs. 5.55 billion worth of shares were traded compared to a turnover of almost Rs. 10 billion in the day earlier.

Except Life insurance sector, all other segments ended the day in positive territory. Finance sub-index led the gains and shot up by more than 4%. Development Bank sector also rallied 1.54%. Banking sub-index rose 0.73%. All other sectors ended the day marginally higher. 

Shares of Nepal Bangladesh Bank Ltd were heavily traded with over Rs. 454 million worth of the bank’s stocks changing hands. Nepal Life Insurance Company Ltd and NIC Asia Bank Ltd followed suit with turnovers of Rs. 233 million and Rs. 199 million. Nirdhan Utthan Laghubitta Bittiya Sanstha Ltd, Nabil Bank Ltd and Manjushree Finance Ltd were the other top turnover stocks of the day.

Finance stocks dominated the list of major advances. Central Finance Company Ltd, Samriddhi Finance Company Ltd, Manjushree Finance Ltd, Progressive Finance Ltd and ICFC Finance Ltd surged by over 6% apiece. Reliance Finance Ltd, Nepal Bangladesh Bank Ltd, Chhyangdi Hydropower Ltd and Shree Investment & Finance Company Ltd were among other major winners. 

On the other hand, Sanima Large Cap Fund fell the most. Its unit price ended 3.08% lower to end at Rs. 10.08. CEDB Hydropower Development Company Ltd and Infinity Laghubitta Bittiya Sanstha Ltd suffered losses of 1.61% and 1.34%, correspondingly. Global IME Sammunat Scheme-1, Nepal Life Insurance Company Ltd and Life Insurance Corporation Nepal ended marginally lower. 

A small spinning top formed by Nepse on daily chart reflects uncertainty and lack of conviction among investors. Both buyers and sellers remained active on the day forcing prices to stay at a specified range. Hence, further confirmation with bullish candlestick can indicate possibility of upward move. Technical indicators reflect a neutral momentum in the present context with MACD on the verge of a bullish crossover which might signal extension of the advance further. 2,900 and 2,800 psychological levels are the immediate resistance and 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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