Daily Market Commentary

Nepse sees another correction to trade below 2,900

Published On: September 8, 2021 07:50 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Sept 8: The Nepal Stock Exchange (Nepse) index traded in red since the beginning of Wednesday’s trading. A continuous fall saw the index dip more than 60 points at mid-session. The benchmark plateaued thereafter and traded around 2,880 mark for most of the remaining trading hours. At the close, Nepse fell 60.02 points to close slightly above its intraday low at 2,876.59.

Investor sentiment is taking a knock in the current juncture with continuous selling pressure seen in the Nepalese bourse. Despite Monday’s massive recovery, the index has continued to falter towards its low at 2,800 mark. Turnover has also subsided firmly with a below par market activity of less than Rs. 7 billion.

All sectors suffered losses with Finance and ‘Others’ sub-indices plunging the most. Both sectors were down more than 3%. Development Bank and Manufacturing & Processing sectors, subsequently, dipped 2.87% and 2.75%. All other sectors ended the day in negative territory.

Shares of United Modi Hydropower Ltd were traded the most with a turnover of over Rs. 405 million. Arun Valley Hydropower Development Company Ltd and Swarojgar Laghubitta Bittiya Sanstha Ltd followed suit with turnover of over Rs. 240 million. Ridi Hydropower Development Company Ltd, Rairang Hydropower Development Company Ltd and Universal Power Company Ltd were also actively traded with turnovers of more than Rs. 230 million each.

Sanima Life Insurance Company Ltd jumped 10% in its post listing rally. Excel Development Bank Ltd and Rairang Hydropower Development Company Ltd rose more than 8% each. Universal Power Company Ltd, Swarojgar Laghubitta Bittiya Sanstha Ltd and United Modi Hydropower Ltd were the other major gainers with advances of 7.64%, 6.98% and 3.62%.

Life Insurance Corporation Nepal was the day’s worst performer with the insurance scrip dipping 6.06%. Goodwill Finance Company Ltd, Civil Laghubitta Bittiya Sanstha Ltd and Guheshwori Merchant Bank & Finance Co. Ltd also came under pressure and slumped more than 5%. Other finance and development bank stocks also struggled.

On the news front, Swarojgar Laghubitta Bittiya Sanstha Ltd announced its dividend for the fiscal year 20/21. As per the preliminary proposal from board, the microfinance will be distributing 25% stock dividend to its shareholders.

On the technical analysis front, the index formed a bearish candlestick signaling extension of the downward move. Another rebound from 2,800 can mark the end of the correction, whereas a possibility of consolidation in the current range also remains intact. Sideways movement can also be expected on the back of recent dipping volumes. A breakout above 3,000 can signal resumption of the uptrend. 

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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