Daily market commentary

Nepse slides in first ever five-hour trading session

Published On: March 16, 2020 11:02 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Stocks posted a feeble start to the week, as the local bourse remained under pressure throughout Sunday's trading session. After giving up more than 25 points in the first trading hour on Sunday, Nepal Stock Exchange (Nepse) index gained some ground but eventually succumbed to bearish pressure in the latter trading hours. Consequently, Nepse sank a massive 64.14 points or 4.66% to end the first five-hour session at 1,313.04. 

The relentless selling pressure in the past couple of weeks has dragged Nepse almost 20% lower from its February end high of 1,632 points mark. As tensions rise in the global economies due to COVID-19 pandemic along with oil price war, overall fear has been swelling rapidly with the local market too reeling under pressure. Investors had braced for some correction after the three month rally, but the steep slide was much worse than what had been expected. 

On Sunday, market activity hovered around Rs 2 billion mark. The broad downward rally's effect was seen in all traded sectors. Losses were led by Life Insurance and Non-Life Insurance groups which tanked 7.87% and 6.94%. Trading and Banking sub-indices also suffered significant selling wave as both closed down roughly 5% each. 

All other sectors saw losses of around 3% each. Shares of Nepal Life Insurance Company Ltd were most actively traded. Over Rs 173 million worth of the stocks changed hands. Subsequently, NIC Asia Bank Ltd and NMB Bank Ltd posted turnovers of Rs 114 million and Rs 105 million. Shivam Cements Ltd, Nepal Bank Ltd and Himalayan Distillery Ltd were among other active stocks of the day. Market breadth was largely in favor of bears as only 3 scrips managed to close in the green. United Modi Hydropower Ltd rose 0.97%, while Sindhu Bikash Bank Ltd and Womi Microfinance Bittiya Sanstha Ltd edged 0.77% and 0.47% higher. 

On the other hand, Himalayan General Insurance Company Ltd and Samudayik Laghubitta Bittiya Sanstha Ltd remained locked into the lower circuit limit of negative 10%. Other microfinance scrips followed suit as Mithila Laghubitta Bittiya Sanstha Ltd, Nerude Laghubitta Bittiya Sanstha Ltd, Support Microfinance Bittiya Sanstha Ltd, Nepal Seva Laghubitta Bittiya Sanstha Ltd and Mero Microfinance Bittiya Sanstha Ltd slumped over 9% each. 

On the ARKS technical front, Nepse index formed another steep bearish candlestick on the daily timeframe indicating downtrend continuation. In the meantime, the index breached its support at 1,350 points mark which suggests the index will most likely test its support zone at around 1,280 points to 1,300 points zone. Momentum indicators also show that the selling pressure is yet to ease off with both Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) pointing downwards.

This column is produced by ARKS Capital Advisors Ltd
(Views expressed are those of the producer and do not necessarily reflect those of this publication)

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