Daily market commentary

Nepse sees modest drop

Published On: January 23, 2020 09:38 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Stocks dipped sharply in the initial trading hour on Wednesday. After a failed attempt to trade in green in the afternoon, selling pressure prevailed in the latter trading hours. Following a steady decline toward the close, Nepse ended the day 7.05 points, or 0.53%, lower at 1,313.42 points.

The stock market witnessed another indecisive session as the index traded within a confined range. The moderate loss also indicates stretched profit booking in the local bourse. On a positive note, buyers have continued to absorb the selling pressure enabling the market to hold ground above 1,300-point mark. Further, active participation was seen in the session as total turnover crossed Rs 1.5 billion mark for a second straight day.

All major sectors closed the day in red. Only Life Insurance sector closed the day with a considerable gain. The group's sub-index rallied 2.32%. Leading the losses was Hydropower sub-index which saw a slump of 1.53%, while Trading and Hotels sectors were also down by 1.37% and 1.15%, respectively. Development Bank and Manufacturing & Processing segments also registered losses of roughly 1% each. All other sectors closed marginally lower.

Shares of Global IME Ltd posted record individual stock turnover of Rs 611 million on third day of resumption of trading after merger with Janata Bank Nepal Ltd. The high volume is mainly attributed to post merger selling by shareholders of Janata Bank Nepal Ltd following decent gains from the amalgamation. Stocks of Nepal Bank Ltd worth Rs 91 million were actively traded in the bourse. Life Insurance scrips followed suit. Surya Life Insurance Company Ltd, Asian Life Insurance Company Ltd, Nepal Life Insurance Company Ltd and Prime Life Insurance Company Ltd saw turnovers of at least Rs 50 million each.

Life insurance stocks also dominated the list of major advances. Shares of Both Asian Life Insurance Company Ltd and Prime Life Insurance Company saw a rally of over 8% each. Meanwhile, Surya Life Insurance Company Ltd's shares jumped by 5.24%, while unit prices of Shrijana Finance Ltd, Siddhartha Equity Fund and Global IME Sammunat Scheme-1 were up by 4% each. 

On the other hand, shares of Panchthar Power Company Ltd tumbled 8.69%. Share prices of Kanchan Development Bank Ltd and Central Finance Co Ltd struggled, registering drops of over 7% each. Other major declining units include Nabil Equity Fund, Synergy Power Development Ltd and Sparsha Laghubitta Bittiya Sanstha Ltd.

ARKS technical analysis indicates the market consolidating around 1,300-point range with a small bearish candlestick formation. Intraday trading range has narrowed further which indicates some more sideways movement on cards. Technical indicators, meanwhile, suggest bulls slowly losing momentum. However, a strong psychological support is present at 1,300 points which might provide a base for the market for further advances.

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