Daily Market Commentary

Nepse up slightly after three days of freefall

Published On: August 26, 2021 07:30 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, August 26: The Nepal Stock Exchange (Nepse) index witnessed an upbeat start to Thursday’s session. The index climbed above 3,100 mark in the morning, but fell in the negative territory within the first hour of trading. However, the benchmark continued to climb after mid-day. Strength seen in energy stocks pushed the index higher in the afternoon. At the close, Nepse stood at 3,094.05 – up 17.60 points against the session earlier.

Following a sharp decline of more than 120 points in three straight days, the index recovered slightly to inch towards 3,100 level. Traders flocking to buy energy, development bank and finance stocks at a relatively cheaper rate helped the index recoup the recent losses partially. More than Rs. 13 billion worth of equities changed hands, a slight improvement against the day earlier.

While most of the sectors ended in red, few sectors saw notable strength. Hydropower stocks rose 5.08%, followed by Development Bank and Finance segments, which shot up by 4.17% and 3.82%. Microfinance and Hotels & Tourism sub-indices edged slightly higher. On the other hand, Life Insurance segment suffered the most and dipped around 1%. All other sectors saw modest losses.

Arun Valley Hydropower Development Company Ltd was traded the most with a turnover of almost Rs. 1 billion. Arun Kabeli Power Ltd and Ridi Hydropower Development Company Ltd followed suit with gains of Rs. 450 million and Rs. 345 million. Mahalaxmi Bikas Bank Ltd, Kamana Sewa Bikas Bank Ltd and ICFC Finance Ltd were the other actively traded stocks of the day.

8 companies remained locked in the upper circuit limit of 10%. Narayani Development Bank Ltd, Shree Investment Finance Co Ltd, Guheshwori Merchant Bank & Finance Co. Ltd, Arun Valley Hydropower Development Company Ltd, Corporate Development Bank Ltd, Ankhu Khola Jalvidhyut Company Ltd, Ghalemdi Hydro Ltd and Jeevan Bikas Laghubitta Bittiya Sanstha Ltd rallied sharply.

On the other hand, Life Insurance Co. Nepal dipped 3.33% followed by Shivam Cements Ltd which fell 2.30%. Gurkhas Finance Ltd, Naya Sarathi Laghubitta Bittiya Sanstha Ltd and Mithila Laghubitta Bittiya Sanstha Ltd also lost around 2% apiece.

As per the ARKS technical analysis, the index formed a small spinning top candlestick on the daily timeframe reflecting indecision. Momentum indicators also point towards possibility of some consolidation or correction in the current zone. 3,100 mark has acted as a resistance a breach of which is necessary for the index to extend its upward move. On the other hand, a dip can see the index test 3,000 range.

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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