Daily Market Commentary

Nepse hits fresh high with record volume

Published On: May 18, 2021 07:05 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, May 18: The equity market continued to see notable strength extending gains from prior trading sessions. Stocks traded slightly higher in the morning before a steady advance pushed the benchmark to a fresh record. At the close, Nepse posted a gain of 34.59 points or 1.25% to end Tuesday’s trading at 2,793.81. 

Posting a seven straight days of gain and third record close near 2,800 mark, the sentiment remains firmly bullish ahead of the budget unveiling due in latter part of May. While energy stocks fueled the recent rally, almost all sectors saw buying pressure on Tuesday. The advance seen in the equity market has garnered much enthusiasm from market participants as turnover crossed Rs. 11 billion mark for the first time in Nepalese stock market history. 

Hotels and Tourism segment rallied the most with three out of four of its composite stocks hitting the upper circuit. The sub-index surged 6.15%. Finance stocks were the other major gainers with the respective sub-index closing 5.81% higher. Hydropower and Development Bank sub-indices shot up by over 3%. Investment Index, meanwhile, rose 2.78%. All other sectors ended the day in green except Manufacturing & Processing group, which fell 0.09%. 

Shares of Nepal Reinsurance Company Ltd led the list of top turnover stocks. Over Rs. 679 million worth of the reinsurer’s shares changed hands. National Life Insurance Company Ltd and Arun Kabeli Power Ltd followed suit with turnovers of Rs. 315 million and Rs. 314 million. IME General Insurance Ltd, Citizen Investment Trust Ltd and National Hydropower Company Ltd were among other actives with turnovers of Rs. 308 million, Rs. 277 million and Rs. 276 million. 

More than 30 companies hit the upper circuit limit on Tuesday. Soaltee Hotel Ltd, Oriental Hotels Ltd, National Hydropower Company Ltd, Bishal Bazar Company Ltd and Best Finance Company Ltd were among the major gainers. Besides, mainly energy stocks and finance stocks dominated the list of the top advances of the day. 

Shares of Nepal Telecom Ltd and Upper Tamakoshi Hydropower Ltd, on the other hand, fell the most. Both scrip dropped more than 1%. Shikhar Insurance Company Ltd, Jyoti Life Insurance Ltd, NRN Infrastructure and Development Ltd and Sanima General Insurance Ltd ended slightly lower. 

The Nepal Stock Exchange (Nepse) index formed a small bullish candlestick on the daily timeframe, suggesting buyers still dominating the market. Besides, influx of new funds has helped the market witness three straight sessions of turnover of around Rs. 10 billion, hence validating the recent surge. Though a correction can be expected in some of the sectors, the overall sentiment remains firmly bullish. Previous high of 2,735 is the current immediate 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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