Daily Market Commentary

Nepse stages massive recovery to close session in green

Published On: December 6, 2021 10:26 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Dec 6: A freefall in the morning trading session saw the Nepal Stock Exchange (Nepse) index give up over 70 points by mid-day. A recovery ensued thereafter. The index climbed back towards 2,500 level but saw another minor dip. Stocks continued to make notable recovery in the latter trading hours with the index finally closing with a 32.22-point gain at 2,546.08. 

The equity market saw a significant recovery after a continuous dip of around 300 points in the past couple of weeks. With traders taking heavy buying position around Nepse’s multiple-month low, the stock market finally found some footing at 2,500 mark. Turnover rose to more than Rs. 4.5 billion, against Rs. 4 billion in the session earlier. 

Development Bank, Hydropower and Finance sub-indices rebounded the most. The respective sectors rallied 3.45%, 2.88% and 2.54%. All other sectors ended firmly higher. Heavyweight banks climbed 0.76%. 

Nabil Bank Ltd’s shares were traded the most with a turnover of over Rs. 171 million. National Hydropower Company Ltd, Himalayan Distillery Ltd and Mahalaxmi Bikas Bank Ltd logged in transactions of around Rs. 150 million each. Nepal Telecom Ltd, Api Power Company Ltd and Nepal Bank Ltd were among other actively traded stocks.

Mero Laghubitta Bittiya Sanstha Ltd led the list of gainers with a rally of exactly 10%. Excel Development Bank Ltd and Sahas Urja Ltd also saw strength and jumped 9.55% and 8.17%. Mahuli Samudayik Laghubitta Bittiya Sanstha Ltd, Bottlers Nepal Terai Ltd and Ghalemdi Hydropower Ltd shot up by 7% each.

Janautthan Samudayic Laghubitta Bittiya Sanstha Ltd fell almost 7% after the micro sector lender announced 25% stock dividend for the year 20/21. It had announced 49.4 % stock dividend in the year earlier. Nyadi Hydropower Ltd fell 4.71%, while Unilever Nepal Ltd dipped 2.65%. Sabaiko Laghubitta Bittiya Sanstha Ltd, Terathum Power Company Ltd and Naya Sarathi Laghubitta Bittiya Sanstha Ltd were among other top decliners.

As per the ARKS technical analysis, the index formed a bullish hammer candlestick suggesting firm control of buyers in Monday’s session. Further, Relative Strength Index (RSI) is also showing preliminary sign of reversal. Meanwhile, MACD line still shows short term downward move in action. Hence, a volume backed rebound will validate the short term change in direction in the equity market. 

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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