Daily market commentary

Stocks end lower as BFIs weigh on the broader market

Published On: January 28, 2021 06:40 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 28: The equity market witnessed selling pressure throughout Thursday’s session. After trading higher briefly in the morning, the Nepal Stock Exchange (Nepse) index pulled back to trade in red at mid-day. Stocks struggled further in the afternoon as the benchmark closed the day 16.55 points lower at 2,425.30.

The equity index showed sign of consolidation above 2,400 mark as the buying momentum subsided in most of the sectors. Despite insurance and microfinance stocks supporting the market, selling pressure in heavyweight BFI sectors saw the index close in red. Nonetheless, the bourse posted a record turnover of almost Rs. 10 billion.

Most of the traded sectors maintained negative bias. Only Non-Life Insurance, Manufacturing & Processing and Microfinance ended the day in green with gains of 3.38%, 2.82% and 2.14%. On the other hand, Banking segment tumbled 2.14% followed by Mutual Fund and Development Bank groups which lost around 1.7% each. All other segments closed the day in negative territory.

Nepal Life Insurance Company Ltd’s shares were traded the most with turnover of over Rs. 579 million. Himalayan Distillery Ltd and Nepal Reinsurance Company Ltd also witnessed active transaction with turnover of over Rs. 320 million each. NIC Asia Bank Ltd, Shikhar Insurance Company Ltd and Nepal Telecom Ltd were among other actively traded stocks.

Sagarmatha Insurance Company Ltd and Suryodaya Laghubitta Bittiya Sanstha Ltd were the major winners hitting the upper circuit of positive 10%. Support Laghubitta Bittiya Sanstha Ltd, Aarambha Chautari Laghubitta Bittiya Sanstha Ltd, Prabhu Life Insurance Ltd and Sarathi Nepal Laghubitta Bittiya Sanstha Ltd also rallied more than 9% each. Himalayan Distillery Ltd, Grameen Bikas Laghubitta Bittiya Sanstha Ltd, Nepal Insurance Company Ltd and Prabhu Insurance Ltd were among other major gainers.

On the other hand, Siddhartha Equity Fund and Himal Power Partner Ltd lost more than 6%. Goodwill Finance Company Ltd, Mithila Laghubitta Bittiya Sanstha Ltd and Gurans Laghubitta Bittiya Sanstha Ltd declined more than 5% each. Sanima Equity Fund, Progressive Finance Ltd and Green Development Bank Ltd fell over 4%.

As per the ARKS technical analysis, the index formed a bearish candlestick erasing previous day gains. Hence, some correction is on the cards. However, given the index holds ground above 2,400 mark, sideways movement can be expected. Further decline below that level can see the index test support at 2,350. Overall, the short-term uptrend remains intact.

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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