Daily market commentary

Stocks end little changed as market activity sinks firmly

Published On: March 16, 2021 07:45 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, March 16: The equity market opened in green and traded slightly higher in the first trading hour. A rally saw the Nepal Stock Exchange (Nepse) index climb above 2,400 points at mid-day, but a firm correction pulled the index towards red in the afternoon. Following a late afternoon recovery, the index ended the day with a modest 2.56 point’s gain at 2,391.74.

The index has continued to see low volumes as investors have shown relatively subdued enthusiasm to participate in the market, due to which average turnover dropped markedly. The exchange saw its year-to-date lowest daily turnover of Rs. 3.37 billion. Hence, some sideways movement can be expected with no aggressive buying and selling in the market.

Sectors showed mixed results. Hotels and Tourism segment shot up by 3.36%, while Life Insurance sector rose 1.46%. Microfinance, Manufacturing & Processing, Investment, Banking and Finance segments also inched higher. On the other hand, Trading and Hydropower sub-indices retraced 1.92% and 1.51%. ‘Others’ group also fell by over 1%. Non-Life Insurance, Development Bank and Mutual Fund sectors fell slightly.

Shares of Nepal Life Insurance Company Ltd and Upper Tamakoshi Hydropower Ltd were the most actively traded stocks of the session. The scrips saw turnovers of Rs. 194 million and Rs. 189 million. Nepal Infrastructure Bank Ltd and Nabil Bank Ltd followed suit with transactions of Rs. 170 million and Rs. 139 million. National Hydropower Company Ltd, Hydroelectricity Investment and Development Company Ltd and NIC Asia Bank Ltd were the other heavily traded shares.

Chandragiri Hills Ltd continued to lead the gainers hitting the upper circuit of positive 10%. Joshi Hydropower Company Ltd, Ghalemdi Hydro Ltd, Greenlife Hydropower Ltd and Khani Khola Hydropower Company Ltd also shot up by almost 10%. Siddhartha Investment Growth Scheme -2 mutual fund units jumped 7.03%. Other energy stocks followed suit.

Rastriya Beema Company Ltd Promoter Share, on the other hand, came under notable pressure. The stock price tanked 8.81%. Panchakanya Mai Hydropower Ltd, Everest Insurance Company Ltd Promoter Share and Rastriya Beema Company Ltd slumped over 4% each. Arun Valley Hydropower Development Company Ltd, Himal Power Partner Ltd and NIB Pragati Fund also suffered losses of over 3%.

As per the ARKS technical analysis, the market formed a small spinning top candlestick suggesting indecision in the session. Following a decline in 5 consecutive days, the equity market found some footing on the day to close slightly higher. Given the index maintains its ground above 2,370 points, the short-term correction will likely end with possibility of a rebound. Nonetheless, a volume-backed recovery is imperative for the market to make a sustainable advance to fresh highs.

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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