Daily Market Commentary

Nepse jumps 50 points as BFIs stretch rally

Published On: June 6, 2021 08:18 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, June 6: Stocks rallied sharply in Sunday morning as the broad based Nepse index touched 2,920 mark for the first time in its history. A sharp pull-off saw the market give up most of its earlier gains before holding its footing around 2,900 mark in the latter part of the session. Eventually, Nepse ended the day with a gain of more than 50 points to end at 2,906.91. 

The local bourse made fresh record in two back-to-back sessions with the benchmark finally notching its all-time high and maiden close above 2,900 mark. Besides, a series of heavy volumes indicate substantial momentum in the recent rally. Heavyweight BFIs continued to register substantial gains, offsetting corrections seen in other sectors including energy, manufacturing and insurance groups. Market participation also hit all-time high with over Rs. 17.27 billion worth of shares changing hands on Sunday.

In terms of sectoral performance, Investment sub-index rallied 3.97%. Further, Banking sector logged in some of best performance of the day with the sub-index closing the session 3.66% higher. ‘Others’ index also saw strength and rose 3.03%. Development Bank, Mutual Fund, Finance and Microfinance sectors, similarly, ended the day in green. On the other hand, Hydropower segment continued to retrace as the energy sector dipped 1.63% on average. Manufacturing & Processing and Trading sectors also struggled and fell more than 1% each. Life Insurance, Non-Life Insurance and Hotels & Tourism segments fell marginally. 

Shares of Nepal Reinsurance Company Ltd continued to trade actively registering a turnover of over Rs. 1.21 billion. Next, Nepal Infrastructure Bank Ltd saw heavy transactions with over Rs. 839 million worth of the bank’s shares changing hands. Lumbini Bikas Bank Ltd, Kumari Bank Ltd and Mega Bank Ltd followed suit with turnovers of Rs. 548 million, Rs. 466 million and Rs. 448 million. Primarily, commercial bank stocks were actively traded.

Among the day’s major winners, Mahila Laghubitta Bittiya Sanstha Ltd rallied exactly 10%. Goodwill Finance Company Ltd, Lumbini Bikas Bank Ltd and Ridi Hydropower Company Ltd also shot up by almost 10%. Nepal Bangladesh Bank Ltd, Miteri Development Bank Ltd and Pokhara Finance Ltd posted gains of around 9% each. Mega Bank Ltd, Nepal Infrastructure Bank Ltd and Laxmi Bank Ltd were the other top gaining scrips of the session. 

Radhi Bidyut Company Ltd, on the flipside, fell the most and plunged more than 8%. Next, Dibyashwori Hydropower Ltd’s shares also struggled to close the session almost 7% lower. Narayani Development Bank Ltd, Ankhu Khola Jalvidhyut Company Ltd, Union Hydropower Ltd and Ghalemdi Hydropower Ltd’s shares also suffered slumping more than 5% each. Other major losers include Multipurpose Finance Ltd, Best Finance Company Ltd and Joshi Hydropower Development Company Ltd. 

In terms of ARKs technical analysis, the index formed a strong bullish candlestick reflecting buyer’s dominance in the session. Following a breakout of the previous top, the index made fresh highs for two consecutive session. Backed by notable volumes, the index will likely see more move to the upside with possibility of minor corrections or consolidation ahead. Technical indicators also reflect momentum favoring buyers in the current context. An immediate support for the market lies at 2,750 mark. 

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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