Daily Commentary

Nepse stretch winning streak for a fourth straight day

Published On: August 26, 2020 07:24 AM NPT By: Republica  | @RepublicaNepal

Benchmark index jumps 9 points

KATHMANDU, Aug 25:Stretching previous day gains, the benchmark Nepal Stock Exchange (Nepse) climbed almost 10 points in the first few minutes of trading. Following a brief correction on profit booking on some of the stocks, the index fell marginally in the red within the first trading hour. Trading hours, thereafter, saw the index make a recovery to finally close the day in green. At the session’s end, Nepse stood at 1,440.94 points – up 9.34 points against the session earlier.

Tuesday’s gain marked the local bourse’s fourth consecutive day of advance with the index collecting a total of 50 points in those sessions. The prohibitory orders regarding movement in the valley have had little to no effect in the equity market with market recording higher than average transactions in each of the sessions. Total volume for the day stood at over Rs 1.85 billion. While profit booking was evident in some of the insurance stocks on Tuesday in the early hours, bulls prevailed in the latter part of the trading session.

Consequently, most of the traded sectors ended the day in green led by ‘Others’ segment which jumped 2.2 percent. Life Insurance sub-index closely followed with a 1.71 percent gain. Further, Microfinance and Hydropower stocks also saw strength and rose 0.95 percent and 0.82 percent. All other sectors saw strength and edged higher. Only Trading, Manufacturing & Processing and Mutual Fund sub-groups fell marginally.

Nepal Reinsurance Company Ltd saw massive transactions in the day. Over Rs 287 million worth of the reinsurer’s shares changed hands. Neco Insurance Company Ltd’s shares also saw active trading. The scrip logged in a turnover of Rs 143 million. Surya Life Insurance Company Ltd, Nepal Life Insurance Company Ltd and Asian Life Insurance Company Ltd were among other top turnover stocks of the day.

Shares of Nepal Reinsurance Company Ltd saw a massive price jump of over 7 percent. Asha Laghubitta Bittiya Sanstha Ltd, similarly, rallied 6.19 percent. Surya Life Insurance Company Ltd and Panchakanya Mai Hydropower Ltd also saw large upward movements. Both scrip rose by over 5 percent each. Prime Life Insurance Company Ltd, Ganapati Microfinance Bittiya Sanstha Ltd and Himalaya Urja Bikas Company Ltd were the other major advances of Tuesday.

On the other hand, shares of Samriddhi Finance Company Ltd came under pressure and sank 6.54 percent. Union Hydropower Ltd also tumbled almost 5 percent. National Hydropower Company Ltd fell 3.70 percent, Pokhara Finance Ltd dropped 2.61 percent and Ridi Hydropower Company Ltd inched 2.33 percent lower.

On the ARKS technical front, the index formed a small bullish hammer, suggesting buyers still prevailing in the current juncture. However, the momentum has slowed down following the four-day rally. The index can still face a minor resistance at the current level. A further jump can see the index test 1,480-point level. Moving Average Convergence Divergence (MACD) is on the verge of forming a golden cross, which signals sentiment shifting notably towards bulls. Meanwhile, the 1,390-point zone will be the crucial support level above which the uptrend will remain intact.

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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