Daily market commentary

Nepse turns green after Wednesday’s retracement

Published On: January 10, 2020 08:45 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: The Nepal Stock Exchange (Nepse) index rose on Thursday morning but quickly gave up its gains to trade in red. Nonetheless, the stock market saw strength after mid-day and climbed around 6 points to 1,215 points mark. After a slight pullback in the latter trading hours, the index closed at 1,213.11 points – up 3.51 points against the session earlier.

The major average, which retraced around 7.32 points on Wednesday, returned to its winning ways in the last trading day of the week closing the week on a firmly bullish note. The index recouped some of its previous day losses on the back of massive gains coming from shares of microfinance scrips. Further, the market has been witnessing a series of active trading sessions which suggests that the current rise is being backed by significant momentum. Hence, the market is less likely to lose steam anytime soon. Total turnover stood at Rs. 837 million on Thursday.

On the sectoral front, microfinance sub-index led the day’s rally with a 3.49% rally. Non-Life Insurance segment also saw considerable strength with its sub-index rising 2.07%. Trading, Development Bank and Life Insurance sub-indices also closed the day marginally higher. On the flip side, Mutual Fund sub-index dropped 0.7%. Manufacturing & Processing, ‘Others’ and Hotels sectors, meanwhile, saw losses of 0.44%, 0.39% and 0.33%. Sub-indices of Banking and Finance sectors were also slightly down in the session.

In terms of stock wise turnover, Civil Bank Ltd Promoter Share were traded the most. More than Rs. 200 million worth of the scrips changed hands. Microfinance stocks followed suit as Grameen Bikas Laghubitta Bittiya Sanstha Ltd and Deprosc Laghubitta Bittiya Sanstha Ltd posted turnovers of Rs. 24 million and Rs. 23 million respectively. First Microfinance Development Bank Ltd and Womi Microfinance Bittiya Sanstha Ltd’s shares were also actively traded with turnovers of Rs. 17 million apiece. Sana Kisan Bikas Bank Ltd, Prabhu Bank Ltd and Shivam Cements Ltd were the other top turnover scrips of the day.

Microfinance scrips dominated the list of advances led by Swabhimaan Laghubitta Bittiya Sanstha Ltd which rallied to hit the upper circuit at positive 10% mark. Likewise, Support Microfinance Bittiya Sanstha Ltd, Samata Microfinance Bittiya Sanstha Ltd and Ghodighoda Laghubitta Bittiya Sanstha Ltd shot up by almost 10% each. Mahila Sahayatra Microfinance Bittiya Sanstha Ltd, Nepal Seva Laghubitta Bittiya Sanstha Ltd, Samudayik Laghubitta Bittiya Sanstha Ltd, Vijay Laghubitta Bittiya Sanstha Ltd and Civil Laghubitta Bittiya Sanstha Ltd also closed over 9% higher.

Conversely, Reliance Finance Ltd was the biggest losing scrip on Thursday. Its share price tanked 5.73%. Central Finance Co. Ltd also struggled closing down by 3.78%. Other losing scrips include Himalayan Power Partner Ltd, Nepal Insurance Co. Ltd, Arun Valley Hydropower Development Co Ltd and Mountain Hydro Nepal Ltd which registered declines of at least 2% each.

ARKS technical analysis indicates the market forming a small bullish spinning top candlestick formation on the daily timeframe suggesting lack of conviction in the day’s session. In the meantime, Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) suggest buyers in control in the present context. Further, the equity index has managed to trade above 1,200 points psychological level which reflects a possibility of another move upwards.

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