Daily market commentary

Nepse gives up over 45 points as uncertainty looms

Published On: March 13, 2020 01:09 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, March 13: The local stock market faced a sharp slide in the morning session on the Thursday with the Nepal Stock Exchange (Nepse) index giving up over 25 points in the first 20 minutes of trading. Some strength preceded as bulls tried to gain control thereafter. Nonetheless, the market failed to trade in green and witnessed a steady slide after midday. The benchmark index eventually shed a total of 45.91 points to close the week at 1,377.18 points.

The stock market took a breather from the relentless downward movement on Wednesday giving some hope of a rebound to investors. However, Thursday’s session saw sellers prevailing for the entire trading period. Taking cues from the turmoil in stock markets worldwide, the benchmark index also succumbed to the broad selling pressure seen on the day. Further, with a series of volatile trading sessions where the index gyrated toward either side of the spectrum, indecision continues to be the theme of the stock market. While some market participants are fleeing the secondary market, others are taking it as an opportunity to buy stocks at a bargain as reflected by another active session. Over Rs, 2 billion worth of securities were exchanged on the day.

The broad downfall saw all sectors close in the negative territory. Hotels and Non-life Insurance segments led the losses as their respective indices slid over 5%. Similarly, Microfinance, Hydropower and Banking sub-groups struggled and gave up over 3% each. All other traded sectors suffered and ended notably lower on Thursday. 

Shares of Nepal Life Insurance Ltd continued to trade actively with transactions amounting to almost Rs 200 million. NIC Asia Bank Ltd, NMB Bank Ltd and Shivam Cements Ltd were the other active stocks of the day with turnovers of Rs 94 million, Rs 78 million and Rs 70 million, respectively. 

Only a few stocks managed to make it to the list of gainers. Shree Investment Finance Co Ltd bucked the trend as its share price was up by 2.48%. Following closely were 10.50% SBL Debenture 2082, Dibyashwori Hydropower Ltd and Nabil Balanced Fund which added roughly 2% each on their respective share prices. Mahila Sahayatra Microfinance Bittiya Sanstha Ltd and Central Finance Co. Ltd were the other gainers of the day.

On the other hand, the share price of Swabhimaan Laghubitta Bittiya Sanstha Ltd gave up its prior day’s gains tumbling 10% to Rs 990 per unit. Radhi Bidyut Company Ltd and Himal Dolakha Hydropower Company saw their share prices fall by over 9% each. Bottlers Nepal Terai Ltd and Sparsha Laghubitta Bittiya Sanstha, meanwhile, saw their share prices go down by 8% each. IME General Insurance Company Ltd, Nepal Finance Ltd and Khanikhola Hydropower Co Ltd also followed suit.

As per the ARKS technical analysis, the market failed to confirm a bullish reversal pattern with a formation of a strong bearish candlestick. Hence, the outlook remains biased toward the negative side. Both Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) lines face southward, suggesting that selling pressure is yet to ease off remarkably. Given the market sinks further, the index’s movement at 1,350 points must be closely monitored in order to gauge the possible direction of the secondary market for the near term.

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