Daily market commentary

Nepse sheds 45 points

Published On: February 25, 2021 07:50 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Feb 25: Following a small recovery in Wednesday, the Nepalese equity market extended its correction on Thursday. The Nepal Stock Exchange (Nepse) index witnessed constant pressure in the session. After trading unchanged for about half an hour, the benchmark saw a steady decline eventually finishing at 2,554.14 – down 44.94 points against the session earlier.

With political scenario yet to stabilize following the reinstatement of parliament, investors have resorted to cautious trading resulting in a more subdued buying pressure. Turnover also fell amidst the current uncertainty. Only around Rs. 6 billion worth of shares were traded on the day.

Finance sector suffered the most reflected by a 2.17% dip in the group’s sub-index. Banking segment also took a knock and fell 2%. Trading, Development Bank and ‘Others’ sectors struggled with declines of over 1% each. All other sectors closed the day in negative territory in Thursday’s broad selloff.

Shares of Nepal Infrastructure Bank Ltd were heavily traded with a total transaction of over Rs. 903 million. Nabil Bank Ltd, National Hydropower Company Ltd and Nepal Bank Ltd followed with turnovers of over Rs. 211 million. NIC Asia Bank Ltd, Neco Insurance Company Ltd and Global IME Bank Ltd were among other top turnover stocks.

Chandragiri Hills Ltd was the biggest percentage gainer of the day as its stock price shot up by 10%. National Hydropower Company Ltd also saw strength and jumped 8.22%. Citizens Mutual Fund-1 and Sanima Large Cap Fund rose around 3% each. Everest Bank Ltd Convertible Preference Share, Mero Microfinance Bittiya Sanstha Ltd and Oriental Hotels Ltd were among other major gainers.

Sunrise First Mutual Fund, on the other hand, tanked 6.84%. Subsequently, Shree Investment Finance Co. Ltd and IME General Insurance Ltd slumped over 5% apiece. Samriddhi Finance Company Ltd, Mountain Hydro Nepal Ltd and Goodwill Finance Company Ltd closed over 4% lower. Other energy and microfinance stocks also saw notable declines in the session.

The formation of a large bearish candlestick reflects sellers’ dominance in the current sessions. Hence, further correction can be expected towards 2,500 level.  Further, ARKS technical indicators also suggest loss of momentum, which might suggest consolidation around the current zone. A rebound from 2,500 can provide opportunities to go long, while immediate resistance lies at 2,700.

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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