Daily Market Commentary

Stocks end marginally lower erasing prior day gains

Published On: July 20, 2021 09:15 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 20: Stocks opened Tuesday’s session in green with the benchmark Nepal Stock Exchange (Nepse) index trading briefly above 3,000 mark in the morning. The market saw some volatility in the first half of the session gyrating between 2,980 and 3,000 mark but a correction towards the closing hours dragged the index in negative territory. At Tuesday’s close, Nepse was down 9.01 points at 2,985.57.

Following two sessions of gains, the equity market lost some steam as reflected by modest loss on Tuesday. However, turnover dipped slightly as the market is witnessing a short-term consolidation after a rise of around 200 points in the past couple of weeks. With earnings reports coming in from BFIs, the financials of individual companies will likely play a part in determining the moves of the respective stocks. Tuesday’s turnover stood at 7.90 billion.

Sectors ended mixed. Mutual Fund sub-index shot up by 6.29% after Laxmi Unnati Kosh announced 25% dividend to its unit holders, becoming the first mutual fund to announce dividend for the year 77/78. Subsequently, the whole sector saw strength with dividend expectations reflecting in appreciated unit price. Trading category rose 3.20%. Hotels & Tourism, Hydropower and Manufacturing & Processing sub-indices also ended in green. On the other hand, Finance segment fell 1.37%, while Non-Life Insurance & ‘Others’ sub-indices declined 1.29% and 1.21%. Investment, Development Bank, Life Insurance, Microfinance and Banking sub-indices also ended in negative territory.

Arun Kabeli Power Ltd and Arun Valley Hydropower Development Company Ltd were the most active stocks of the day with respective turnovers of Rs. 388 million and Rs. 270 million. Nepal Insurance Company Ltd, NIC Asia Bank Ltd and Agriculture Development Bank Ltd posted turnovers of Rs. 242 million, Rs. 235 million and Rs. 227 million. Manjushree Finance Ltd, Nabil Bank Ltd and National Hydropower Company Ltd were the other active stocks of the day. 

Mutual Fund stocks dominated the gainers’ list with most registering gains of almost 10%. Barun Hydropower Co. Ltd and Mountain Hydro Nepal Ltd rallied more than 9%. CEDB Hydropower Development Company Ltd, Arun Valley Hydropower Development Co. Ltd and Agriculture Development Bank Ltd jumped around 7% each.

On the other hand, Nepal Insurance Company Ltd fell 4.78% followed by Summit Laghubitta Bittiya Sanstha Ltd which dipped 2.91%. Hydroelectricity Investment & Development Company Ltd, Pokhara Finance Ltd, Rastriya Beema Company Ltd and Gurkhas Finance Ltd were the other major laggards with losses of more than 2% apiece. 

As per the ARKS technical analysis, the index formed a small bearish candlestick suggesting modest selling pressure after two days of advance suggesting possible extension of consolidation or correction. Technical indicators continue to reflect strength. However, a breakout above 3,000 mark is necessary before bulls can make a significant move to the upside. Immediate support of the market lies at around 2,920. 

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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