Daily market commentary

Nepse zooms past 1,500 points

Published On: February 26, 2020 11:02 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Stocks opened Tuesday's trading on a weak footing driven by early profit booking. However, following a sharp recovery to 1,500 points, the Nepal Stock Exchange (Nepse) index plateaued in the psychological mark. The major average then witnessed a significant advance pushing the index higher by 43.02 points to close the day at 1,545.19 points.

Following a modest dip on Monday, bulls gained full control of the market on Tuesday. Banks rally lost some steam but the sector closed higher, nonetheless. The day's surge was mainly driven by Life Insurance segment. Investors continue to take heavy long positions, switching between segments to optimize the investments expecting the bullish movement to continue further. The local bourse has continued to see a series of heavy trading in recent days. Roughly Rs 3 billion worth of securities changed hands on the day. The exchange had logged turnovers of Rs 3.6 billion and Rs 3.4 billion on Sunday and Monday, respectively. 

Among active stocks, shares of Himalayan Distillery Ltd were traded the most in the bourse. Over Rs 163 million worth of the shares of the liquor maker were traded on the day. Insurance companies followed suit as Nepal Life Insurance Company Ltd, Shikhar Insurance Company Ltd and Neco Insurance Co Ltd posted turnovers of Rs 143 million, Rs 106 million and Rs 94 million, respectively. NMB Bank Ltd, NIC Asia Bank Ltd and Citizen Investment Trust were among active stocks of the day.

Share prices of three companies hit the upper circuit of 10% as Gurans Life Insurance Company Ltd, Himalayan Distillery Ltd and Swadeshi Laghubitta Bittiya Sanstha Ltd led the day's gains. Unilever Nepal Ltd, Shikhar Insurance Company Ltd and Life Insurance Co Nepal were next on the list with gains of nearly 10%. National Hydropower Company Ltd, Arun Valley Hydropower Development Co Ltd and Api Power Company Ltd were among other major gainers in the session. Api Power Company Ltd has received the go ahead from Securities Board of Nepal (Sebon) for 200% rights issue. The amount raise from the issue will be used in the construction of Upper Chameliya Hydroelectricity Project (40 MW), according to the company.

On the other hand, Dibyashwori Hydropower Ltd saw its share price tumble by 3.63%. Finance scrips like Progressive Finance Ltd and Reliance Finance Ltd saw their respective share prices fall by over 2%. Unit prices of Everest Bank Ltd Convertible Preference Share and NIBL Pragati Fund were by over 1% each.

As per ARKS technical analysis, the market formed a small bullish candlestick on the daily timeframe as the market continued to surge with notable momentum. Volumes have been very supportive of the rally suggesting that a major correction is less likely. Technical indicators also suggest significantly upbeat sentiment prevailing in the market. Support lies at 1,500-point mark, while the market may face some resistance at around 1,580 points.

This column is produced by ARKS Capital Advisors Ltd
(Views expressed are those of the producer and do not necessarily reflect those of this publication)

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