Weekly Market Commentary

Nepse stretches winning run with record weekly turnover

Published On: June 12, 2021 05:47 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, June 12: Following a gain of 41.37 points in the week earlier, the bourse continued to see upbeat movement since the beginning of the week. On Sunday, the local equities’ benchmark Nepse shot up by more than 50 points. After closing little changed on Monday, Tuesday saw another advance of 53.44 points. Stocks gave some ground towards the latter half of the week. Nepse index fell 13.56 points on Wednesday followed by a modest dip of 1.80 points on Thursday. Despite some retracement seen towards the end of the week, Nepse ended firmly higher at 2,944.78 points with a weekly gain of 88.01 points or 3.08%.

Enthusiasm in the broader market is yet to subside. Furthermore, investors’ interest seen in Finance and Development Bank stocks helped the market roar past 2,900 mark in the review period. Increased market participation and substantial investments poured into the market by existing as well as fresh investors have kept any major corrections at check. The last major weekly correction came in late-April, where the index shed around 37 points. Turnover also set a fresh record with over Rs. 83 billion worth of equities changing hands.

Mainly as investors are switching between stocks and not necessarily cashing out gains, the stock market has not seen any major pullbacks. In the past few weeks, energy, development bank and finance segments were leading the market, while heavyweight banks and insurance stocks are yet to see upbeat movement. Further, with Q4 end approaching, speculations on earning results of such companies will likely be pivotal in determining the possible movement of the segments. 

Class ‘A’ stocks moved in tandem with the broader market as the Sensitive Index closed up by 2.88%. Among sectors, Development Bank and Finance companies saw massive strength recording weekly gains of 25.01% and 16.45%. Hydropower sector followed suit with 6.04% jump. Mutual Fund and Manufacturing & Processing sub-indices registered advances of 5.5% and 4.26%. All other segments ended in positive territory while only few saw weekly losses. Hotels & Tourism, Trading and Microfinance averages fell by 2.56%, 2.09% and 0.99%, respectively. 

AS per the ARKS weekly technical analysis, the index formed a bullish candlestick reflecting significant control of buyers in the review period. A fresh high also means extension of the uptrend backed by gradual increase in volumes. Both Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) reflect bullish momentum prevailing in the current context. Barring some minor corrections, the index can be expected to stretch gains going into the months ahead.

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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