Daily market commentary

Nepse unchanged after two days of gain

Published On: January 30, 2020 08:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 30: Stocks climbed higher in initial trading on Wednesday as Nepal Stock Exchange (Nepse) index was up 5 points in the first trading hour. However, gains were truncated as bears prevailed after mid-day. Subsequently, the index traded mostly in red in the latter trading hours while climbing intermittently in positive territory. At the close, Nepse stood almost unchanged with a 0.27 points drop at 1,305.88 points.

Following a rebound from 1,270 points mark since Monday, the index is now consolidating around 1,300 points mark. Mainly microfinance scrips have stretched their rally further as the class 'D' financial institutions have continued to impress with outstanding quarter results so far. Meanwhile, other sectors saw marginal movements in the last couple of sessions. Active participation was witnessed as the bourse marked another day with a turnover of over Rs 1 billion.

Sectoral performance show slight negative bias with most segments ending the day in red. Mutual Fund sub-index suffered and lost 1.38%. Hydropower and Banking stocks also came under slight pressure shedding roughly 0.7% each. Manufacturing & Processing, Life Insurance, Finance, Development Bank and 'Others' sectors also ended the day slightly lower. Conversely, Microfinance sub-index shot up by 4.34% followed by Trading sub-index which rose 2.08%. Non-Life Insurance and Hotels segments also edged higher.

Shares of Nadep Laghubitta Bittiya Sanstha Ltd witnessed the highest turnover of the day as more than Rs 83 million worth of the microfinance's shares changed hands. Shikhar Insurance Co Ltd followed closely with a turnover of Rs 62 million. Chhimek Laghubitta Bikas Bank Ltd's shares were also actively traded with a turnover of over Rs 56 million. Nepal Life Insurance Company Ltd, Swabalamban Laghubitta Bittiya Sanstha Ltd and Prabhu Bank Ltd were among other top turnover scrips.

Microfinance stocks dominated the list of advances. Nadep Laghubitta Bittiya Sanstha Ltd and Nerude Laghubitta Bikas Bank Ltd jumped by over 9% each. Similarly, Nepal Seva Laghubitta Bittiya Sanstha Ltd, Gurans Laghubitta Bittiya Sanstha Ltd, RMDC Laghubitta Bittiya Sanstha Ltd and IME General Insurance Company Ltd rallied more than 8% apiece.

Progressive Finance Ltd, on the other hand, took a major knock as its share price tumbled 5.5%. Shares of Nepal Hydro Developers Ltd also struggled and lost 4.58%. Further, Shangrila Development Bank Ltd, National Hydropower Company Ltd and Samriddhi Finance Company Ltd lost 3.7% each. Other major decliners include United Finance Ltd, Nabil Equity Fund and NIBL Pragati Fund.

ARKS technical analysis indicates the market forming a doji candlestick on the daily time frame reflecting indecision in the equity market. However, the index maintained its stance above 1,300 points mark for a third consecutive day. As 1,300 points mark is regarded as a crucial psychological mark, the movement around this level will be key for investors to gauge the possible short term trend of the equity market. Meanwhile, technical indicators suggest neutral sentiment prevailing in the equity market.

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