Daily market commentary

Nepse finds support at 1,320 points

Published On: February 11, 2020 09:10 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Feb 11: After trading briefly in green in the morning on Monday, the Nepal Stock Exchange (Nepse) index saw a pullback at mid-day and traded in red for roughly an hour. However, stocks saw strength in the latter half of the trading session and recouped its earlier losses with Nepse closing the day with a modest gain of 4.28 points at 1,324.26 points.

The equity index seemed to have found some ground after a second corrective fall seen in the period of two weeks. With buying pressure seen in some of the traded sectors on Monday, the equity index is likely to hold to its gains seen in the two-month rally so far. However, the current range around 1,300 points mark can still be taken as a consolidation zone, where indecision will likely prevail in the coming sessions. Market activity dropped slightly against the previous day. Total turnover was recorded as Rs 932 million.

Sectors maintained positive bias as only a few sub-indices ended the day in red. Hydropower, Finance, Life Insurance and Mutual Fund sub-indices edged marginally lower. Gains were led by Microfinance and Non-Life Insurance scrips which posted advances of 1.38% and 1.23%, respectively. Trading and Manufacturing & Processing sectors also saw considerable bullish pressure as sub-indices of both closed over 1% higher. All other sectors saw green. Heavyweight banking sector's sub-index eked a marginal gain of 0.07%.

Shares of Shivam Cements Ltd witnessed heavy transaction on the day. Over Rs 136 million worth of the cement manufacturer's shares changed hands. Next, Citizen Investment Trust registered a total turnover of Rs 43 million, while NIC Asia Bank Ltd logged in a transaction of Rs 36 million. Neco Insurance Co Ltd and Nepal Insurance Co Ltd posted turnovers of Rs 27 million and Rs 23 million, respectively. Surya Life Insurance Company Ltd, Global IME Bank Ltd, NMB Bank Ltd and Nepal Life Insurance Company Ltd saw turnovers of Rs 20 million each.

Civil Laghubitta Bittiya Sanstha Ltd notched a gain of 8.10%. NLG Insurance Company Ltd and Rairang Hydropower Development Company Ltd closely followed and rose 6.08% and 5.05%, respectively. Other major advances for the day include Samudayik Laghubitta Bittiya Sanstha Ltd, Prudential Insurance Company Ltd and Shivam Cements Ltd which closed over 4% higher each.

Among decliners, Everest Bank Ltd Convertible Preference Share fell the most as its price sank 7.36%. Support Microfinance Bittiya Sanstha Ltd, Khanikhola Hydropower Co Ltd, and Joshi Hydropower Development Company Ltd's shares also struggled and tumbled 6.39%, 5.17% and 4.76%, respectively. Other major losing securities include Swabhimaan Laghubitta Bittiya Sanstha Ltd, Goodwill Finance Co Ltd and Global IME Sammunat Scheme–1. In the news, NMB Bank Ltd is set to acquire Kanchan Development Bank Ltd as per a notice published by Nepse. Following the acquisition agreement, trading of Kanchan Development Bank Ltd's shares has been halted in the exchange.

On the ARKS technical front, the index formed a green spinning top candlestick on the daily timeframe suggesting neutral to slightly bullish sentiment in the session. With the day's gain, the index recouped some of its prior session's losses. Nonetheless, investors have refrained from aggressive buying as the index seems to be consolidating around 1,300 points level after a sustained rally. Hence, for another surge to follow, a volume backed breach of 1,350 point's resistance is crucial.

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