Daily market commentary

Nepse stretch sideways movement with a 13-point advance

Published On: January 6, 2021 06:30 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 6: Nepse, the equity market’s benchmark, traded in green in the opening hour of Wednesday’s trading session. The index climbed more than 20 points at mid-day but pared some of its earlier gains in the afternoon. Thereafter, the stock market hovered in green throughout the latter trading hours finally closing with a gain of 13.07 points. Nepse ended Wednesday’s session at a new closing high at 2,178.57.

The index recouped Monday and Tuesday’s losses in the trading session as stocks are consolidating in the current scenario. With the index making fresh highs, the market has not witnessed any notable correction as investors are approaching the market with high confidence. Market participation also remained moderate. Over Rs. 4.42 billion worth of shares changed hands on the day.

Microfinance segment led the sectoral performance chart. The group’s sub-index rose 1.68%. Non-Life Insurance and Development Bank sub-indices also climbed over 1% each. All other sectors saw strength and edged higher. Only Trading & Hydropower sub-indices ended the day with modest declines.

Nepal Life Insurance Company Ltd was the most actively traded stock of the day. Over Rs. 213 million worth of its stock changed hands. Shikhar Insurance Company Ltd and Nepal Reinsurance Company Ltd, subsequently, registered turnovers of Rs. 200 million and Rs. 174 million. Nepal Telecom Ltd, Himalayan Distillery Ltd and Sanima Bank Ltd were among other top turnover stocks.

Microfinance scrips dominated the list of gainers. Kalika Laghubitta Bittiya Sanstha Ltd, Janautthan Saumdayic Laghubitta Bittiya Sanstha Ltd and Swabhimaan Laghubitta Bittiya Sanstha Ltd remained locked in the upper circuit of positive 10%. Narayani Development Bank Ltd and Prabhu Life Insurance Ltd followed suit with rallies of over 9% each. Other microfinance stocks also saw considerable strength.

On the other hand, Joshi Hydropower Development Company Ltd tanked 5.13%. Nepal Hydro Developers Ltd and Ghalemdi Hydro Ltd fell 4.20% each. Shree Investment Finance Co. Ltd and Bottlers Nepal Terai Ltd posted losses of 3.80%. Other energy stocks also corrected firmly.

On the technical front, the equity market formed a small bullish candlestick as the index stretched its range bound trading for a third straight day. Hence, both buyers and sellers are at an equilibrium in the present context. Nonetheless, with the benchmark making fresh highs and holding ground around the current zone suggests that the equity market has more legs to the upside. Though some correction can be expected, a notable support for the market lies at 2,100 mark.

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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