Daily Market Commentary

Nepse notches another record high as energy stocks gain

Published On: May 17, 2021 09:12 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, May 17: The broad equity benchmark witnessed a sharp rally in the morning with the Nepse hitting 2,770 for the first time in the exchange’s history. A firm correction pulled the index towards 2,750 mark around mid-day. Nonetheless, buying pressure in the latter trading hours helped the index hold ground in green with a final hour surge pushing the benchmark 20.71 points higher against Sunday’s close. Nepse finished Monday’s session at 2,759.22.

The index marked a record close after a sharp rebound from 2,500 mark hit amidst a steep sell-off in the month of April. The sentiment also remains upbeat amidst back-to-back sessions of notable market participation. Following a turnover of more than Rs. 10 billion mark in the prior trading day, Nepse witnessed a turnover of Rs. 9.58 billion on Monday.

On the sectors front, ‘Others’ and Hydropower segments led the gains. The respective sub-indices jumped 2.63% and 2.52%. Finance sector also shot up by almost 1%. Life Insurance, Mutual Fund and Banking sub-indices posted gains of 0.66%, 0.65% and 0.51%. All other sectors ended the day in green barring Manufacturing & Processing, Hotels & Tourism and Development Bank segments, which ended marginally in negative territory.

Shares of Nepal Reinsurance Company Ltd continued to trade actively. Over Rs. 660 million worth of the scrip changed hands. Nepal Telecom Ltd followed suit with turnover of Rs. 427 million. Shikhar Insurance Company Ltd, next, saw transactions of over Rs. 317 million. Arun Kabeli Power Ltd, Upper Tamakoshi Hydropower Ltd, Nepal Life Insurance Company Ltd and Nepal Infrastructure Bank Ltd were among other top turnover stocks.

Ru Ru Jalbidhyut Pariyojana Ltd remained locked in the positive circuit limit of 10%. Samata Gharelu Laghubitta Bittiya Sanstha also extended its post-listing rally after merger. The micro sector lender rose 9.98%. Radhi Bidyut Company Ltd, Corporate Development Bank Ltd, Progressive Finance Ltd, Gurans Laghubitta Bittiya Sanstha Ltd, Barun Hydropower Co. Ltd, Panchakanya Mai Hydropower Ltd and Nepal Finance Ltd also saw considerable strength with rallies of more than 9%. 

On the other hand, Bishal Bazar Company Ltd fell the most with its share price dropping 1.84%. Shree Investment & Finance Co. Ltd, subsequently, lost 1.76% on its price. Jyoti Bikas Bank Ltd, ICFC Finance Ltd and Himalayan General Insurance Co. Ltd, similarly, closed more than 1% lower. 

 The index formed a small green candlestick on the daily timeframe reflecting buyers’ dominance in the session. However, with the formation of a long upper wick, sellers pushed the prices back below from the intra-day high. Though a breakout from the previous high is visible, some correction can be expected in the coming sessions, after a rally of nearly 140 points in six straight days. Technical indicators also suggest that both short term and medium term uptrend are intact in the current juncture. 

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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