Daily market commentary

Nepse sees modest drop after 3 days of gains

Published On: February 14, 2020 08:17 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Feb 14: Local stocks saw strength in morning trading on Thursday. The benchmark Nepal Stock Exchange (Nepse) index climbed gained around 10 points in the first half of the trading session. However, stocks failed to hold on to its gains and witnessed some selling pressure in the latter trading hours. Eventually, the Nepse index ended the last trading day of the week 1.39 points down at 1,344.59 points.

The bourse, which ended the day in green for three consecutive sessions, faced resistance at 1,350 points. Gains remained truncated with buyers finally giving ground toward the closing minutes of the session. The overall sentiment is bullish, but investors remain cautious after a 200-point rally in the past couple of months. Market activity saw further improvement as Rs 1.77 billion worth of shares were traded on the day. Gains came mainly from Trading sub-group driven by the rise in share price of Salt Trading Corporation. Its sub-index jumped 2.96%. Manufacturing & Processing, Life Insurance and Microfinance sub-indices posted gains of over 1% each. Non-life Insurance sub-index jumped 0.91%, while Finance and ‘Others’ sub-indices edged 0.03% higher. On the other hand, Hotels sector suffered as the group’s sub-index tumbled 1.61%. Heavyweight Banking stocks also struggled as reflected by a 0.78% in its sub-index. Mutual Fund, Development Bank and Hydropower sectors also inched lower.

Shares of Himalayan Distillery Ltd were traded the most as investors flocked to buy the beverage manufacturer’s stocks. Over Rs 120 million worth of Himalayan shares were traded on the day. Shivam Cements Ltd closely followed with turnover of over Rs 97 million. Next on the list were Asian Life Insurance Company Ltd, Citizen Investment Trust and NIC Asia Bank Ltd with Rs 65 million, Rs 58 million and Rs 50 million worth of shares traded, respectively.

Himalayan Distillery Ltd turned in the best performance of the day as its share priced rallied to hit the upper circuit of 10%. Ganapati Microfinance Bittiya Sanstha Ltd’s shares also saw major strength with its share price shooting up by 9%. Meanwhile, Radhi Bidyut Company Ltd and NLG Insurance Company Ltd added 7.48% and 6.40% on their respective share prices. Mahila Sahayatra Microfinance Bittiya Sanstha Ltd, Womi Microfinance Bittiya Sanstha Ltd and Taragaon Regency Hotels Ltd were the other major gainers.

Conversely, losses were led by Nepal Hydropower Developers Ltd which sank over 5% on the day. Subsequently, share prices of Oriental Hotels Ltd, Kalika Power Company Ltd and Green Development Bank Ltd were also down by over 4% each. Share prices of Laxmi Equity Fund, Corporate Development Bank Ltd and Union Hydropower Ltd closed over 3% lower. 

In corporate space, Nepal Telecom Company Ltd has published its earnings report for the second quarter of the current fiscal year. The only listed telecom provider’s net profit saw a slight drop to Rs 4.93 billion against Rs 4.95 billion in the same quarter last year.

In terms of ARKS technical analysis, the market formed a small bearish candlestick indicating that sellers overcame buyers on the day. The correction came after a three-day winning run. Technical indicators suggest the momentum losing some legs in the current juncture. Hence, the index is likely to test its immediate support at 1,320-point mark. On the other hand, breach of 1,350 points with notable volume can see the index make new highs.

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