Weekly Market Commentary

Nepse marginally lower in week after last session recovery

Published On: July 9, 2021 06:57 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 9: The equity market began week with continuation of downtrend as Sunday saw the Nepal Stock Exchange (Nepse) index dip 8.48 points. On Monday, the benchmark lost 11.78 points followed by a decline of 4.63 points on Tuesday. Losses intensified on Wednesday as Nepse gave up another 16.98 points to close just above 2,800 mark. Nonetheless, after four straight days of loss, stocks found some footing with Nepse clawing back 23.98 points on Thursday, keeping the weekly loss below 20 points. The index fell 17.89 points or 0.63% in the week on review to end at 2,825.11.

After ending previous week flat, quarter end selling pressure dragged the index marginally lower this week. The market has witnessed subdued trading in the last couple of weeks partly due to easing-off of prohibitory orders. Meanwhile, investors will likely take a cautious stance as listed companies will begin publishing their financial results after the beginning of the new fiscal year. Weekly turnover continued to falter dropping more than 30% to Rs. 23.26 billion.

Class ‘A’ stocks managed to end the week higher as the Sensitive Index rose 0.16%. Sectors registered mixed performance. On the gainers front, Manufacturing & Processing sector saw strength and rose 2.67%. Trading sub-index ended 1.14% higher. Microfinance, Mutual Fund and Banking sub-indices inched slightly higher. On the other hand, Hydropower, Finance and Hotels & Tourism segments suffered the most. The respective sub-indices dipped 3.93%, 2.88% and 2.17%. Non-Life Insurance, Life Insurance and Development Bank sectors lost more than 1% each. All other sectors saw modest losses. 

As per the ARKS weekly technical analysis, the index formed a small spinning top candlestick suggesting slight indecision. With the index recovering from week’s low of 2,800 to close at 2,825 mark, a minor bullish move was witnessed towards the end of the week. However, a confirmation green candlestick on the weekly timeframe will be crucial for the market to resume its mid-term upward movement. Technical indicators, meanwhile, suggest lack of any major momentum towards either side of the spectrum. Immediate support is provided by 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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