Daily Market Commentary

Nepse tanks 80 points following monetary policy review

Published On: November 28, 2021 10:20 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Nov 28: Stocks came under pressure since the beginning of Sunday’s trading session. The Nepal Stock Exchange (Nepse) index fell 43 points in the morning. After a small recovery attempt before mid-day, the bourse extended its free fall posting a loss of 80.29 points to close at 2,651.49. 

While flat trading was witnessed ahead of the monetary policy review, the market reacted with a huge dip right after its announcement. Even though the review remained void of any negative changes, highly anticipated amendment of the loan against share limit was also absent. Consequently, sentiment remained bearish for the day. Besides, huge selling pressure from particular brokers accentuated the day’s fall. Turnover stood close to Rs. 6 billion. 

All sectors suffered notable declines, Trading and Development bank sub-indices witnessed dips of over 5% each. Hotels & Tourism and Hydropower sub-indices closed over 4% lower. All other sectors saw firm downside close. 

Mahalaxmi Bikas Bank Ltd and Nepal Reinsurnace Company Ltd were the day’s actives with turnovers of Rs. 298 million and Rs. 235 million. National Hydropower Company Ltd, Nepal Telecom Ltd, Nirdhan Utthan Laghubitta Bittiya Sanstha Ltd and Api Power Company Ltd were among other actives. 

ICFC Finance Ltd rose 9.78% in the closing minutes. Samling Power Company Ltd, Nirdhan Utthan Laghubitta Bittiya Sanstha Ltd and Nepal SBI Bank Ltd rose 8.21%, 3.43% and 2.86%. Sanima General Insurance Ltd and Sunrise Bank Ltd also ended in green. 

All other traded stocks closed in the red with maximum losses coming from Himal Power Partner Ltd and Manushi Laghubitta Bittiya Sanstha Ltd both of which fell by over 8%. Prime Life Insurance Company Ltd, Mahalaxmi Bikas Bank Ltd and Joshi Hydropower Development Company Ltd shed over 7% apiece. Mainly energy stocks suffered major declines.

Formation of a firm bearish candlestick, in terms of ARKS technical analysis, reflects weakness in the market. A breach of the 2,680 support was also visible indicating possibility of further correction towards psychological 2,600 mark. Both MACD and RSI are pointed downwards reflecting loss of momentum and sellers control 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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