Daily Market Commentary

Nepse sees modest losses as quarter end approaches

Published On: July 7, 2021 09:45 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 7: Stocks traded briefly in green before pulling back towards the opening level in the morning. Subsequently, the benchmark traded flat for most of the first half of Wednesday’s trading session. Nonetheless, selling pressure in the afternoon dragged the index towards negative territory. At the close, Nepse registered a loss of 16.97 points or 0.6% to end at 2,801.13. 

With the day’s decline, the index has ended in negative territory for a fourth straight day. However, losses have remained modest as investors are taking cautious stance in the equity market but selling pressure with approaching fiscal year end has kept the stocks under restraint of late. Turnover remained on the lower end of the spectrum with turnover of just over Rs. 4 billion. 

Barring Microfinance and Development Bank stocks, which eked modest gains on average, all other sectors ended in negative territory. Biggest losses came from Hydropower, Manufacturing & Processing and Hotels & Tourism segments, with each sector tumbling over 2% apiece. Finance segment suffered 1.54% decline. All other sub-groups saw modest declines. 

Chhimek Laghubitta Bittiya Sanstha Ltd’s shares were traded the most with a turnover of Rs. 435 million. Upper Tamakoshi Hydropower Ltd and Himlayan Distillery Ltd followed suit with transactions of Rs. 262 million and Rs. 235 million. Nepal Reinsurance Company Ltd, Nirdhan Utthan Laghubitta Bittiya Sanstha Ltd and Nepal Telecom Ltd were the other heavily trade scrips. 

Civil Laghubitta Bittiya Sanstha Ltd and Suryodaya Laghubitta Bittiya Sanstha Ltd saw strength and shot up by around 3% each. Sadhana Laghubitta Bittiya Sanstha Ltd, Kalika Laghubitta Bittiya Sanstha Ltd and Narayani Development Bank Ltd also registered gains of over 2% each. Mainly, other microfinance stocks ended in positive territory. 

Shares of Upper Tamakoshi Hydropower Ltd and United Idi Mardi RB Hydropower Ltd came under notable pressure. Both stocks tumbled more than 5%. Radhi Bidyut Company Ltd, Shiva Shree Hydropower Ltd and Ghalemdi Hydropower Ltd posted losses of 3.73%, 3.55% and 3.28%. Universal Power Company Ltd, Oriental Hotels Ltd and Central Finance Company Ltd also closed with declines of over 3% each. 

As per the ARKS technical analysis, the equity index formed a small bearish candlestick on the daily timeframe to rest at the psychological 1,800 level. Dipping volumes also suggest sellers losing momentum. Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) reflect possibility of short-term consolidation in the current juncture. A rebound from the current level supported by notable volumes can provide opportunities to take buying positions.

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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