Daily Market Commentary

Stocks end lackluster session with modest decline

Published On: July 4, 2021 11:46 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 4: The local stock exchange opened Sunday’s session slightly in green. The benchmark Nepse index traded more than 10 points higher in the morning before a steady decline dragged the market in the negative territory. Nepse fell around 5 points at mid-session and hovered along the opening level for most of the remaining trading hours. At the close, Nepse ended with a minor loss of 8.48 points at 2,834.52. 

Stocks are showing signs of consolidation in the sessions of late following a sharp dip in the second half of June. Despite the quarter end selling pressure, Nepse has firmly held ground above 2,800 level suggesting loss of bearish momentum for the short term. Market participation continued to taper off. The equity market saw a relatively dismal turnover of just over Rs. 5 billion. 

Most of the sectors registered minor moves to the downside. Hotels & Tourism, ‘Others’ and Mutual Fund sub-indices, meanwhile, ended in positive territory. Biggest losses came from Finance and Development Bank stocks with the respective sub-indices falling 1.76% and 1.04%. Non-Life Insurance sectors followed suit with a 0.85% dip. Heavyweight banks fell 0.35% on average. 

Nepal Insurance Company Ltd was the most heavily traded scrip on Sunday. Over Rs. 215 million worth of the shares changed hands. Nepal Telecom Ltd and Upper Tamakoshi Hydropower Ltd, next, saw transactions of Rs. 194 million and Rs. 162 million. Himalayan Distillery Ltd and National Hydropower Company Ltd registered turnovers of Rs. 136 million and Rs. 133 million. 

Oriental Hotels Ltd bucked the trend and shot up by more than 8%. CEDB Hydropower Development Company Ltd and Corporate Development Bank also saw strength and climbed 7.25% and 6.16%. Nepal Finance Ltd, Liberty Energy Company Ltd and Nepal Telecom Ltd were among other major gainers of the day. 

On the other hand, Pokhara Finance Ltd and Gurkhas Finance Ltd suffered the most with the corresponding scrips plunging 4.47% and 4.26%. Panchakanya Mai Hydropower Ltd and Reliance Finance Ltd’s shares also came under pressure and dipped around 4% each. Joshi Hydropower Company Ltd, Central Finance Company Ltd, Khani Khola Hydropower Company Ltd and Nepal Insurance Company Ltd were among other major decliners. 

As per the ARKS technical analysis, the equity market formed a small bearish candlestick with small wicks, which suggests lack of clarity in the equity market. The dismal movements of late also suggest that both buyers and sellers refraining from taking heavy positions. Further, dipping volume suggests possibility of consolidation around the current zone. Immediate support can be taken as 2,800 psychological mark. 

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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