Nepse benchmark index goes up 4.22 points

KATHMANDU, Nov 9: Strength from the earlier session carried over to Monday’s trading as Nepal Stock Exchange (Nepse) index opened 5 points higher. After trading in green for the first half of the trading session, some selling pressure was evident in the latter half of Monday’s trading hours. A steady decline pulled the index close to its opening level as Nepse finished at 1,652.81– up 4.22 points against previous close. 

Following 7 sessions of consolidation, the Nepse index climbed to a fresh four-year closing high of 1,652. Despite the index making higher moves, the momentum has remained subdued as overall uncertainty looms in the equity market. The uptrend has remained intact, but the index is likely to consolidate further around the current zone. Meanwhile, the market saw heavy market participation. Rs 3.7 billion worth of securities were exchanged on the day. 

Sectors ended mixed. Hydropower, Banking and Development Bank sectors came under pressure. The respective sub-indices dropped 1.04%, 0.89% and 0.73%. Mutual Fund, Hotels and Life Insurance sectors also ended lower. On the other hand, Trading and ‘Others’ sub-indices rallied over 4% each. Microfinance stocks also saw strength with a gain of more than 1%. Manufacturing & Processing, Non-Life Insurance and Finance sub-indices also inched higher. 

Nepal Reinsurance Company Ltd led the list of actives with turnover of over Rs. 550 million. Nepal Telecom Ltd and Himalayan Distillery Ltd followed suit. Both scrips registered turnovers of more than Rs 130 million. Api Power Company Ltd and Nepal Life Insurance Company Ltd, meanwhile, saw transactions of Rs 109 million and Rs 103 million.

Three stocks remained locked in the upper circuit with Corporate Development Bank Ltd, Mithila Laghubitta Bittiya Sanstha Ltd and Sanima General Insurance Ltd rallying 10% each. Nepal Reinsurance Company Ltd, Bottlers Nepal Terai Ltd, Sadhana Laghubitta Bittiya Sanstha Ltd and Salt Trading Corporation climbed 8.39%, 6.91%, 5.79% and 5.26%, respectively. Other microfinance stocks followed suit. 

Hydropower stocks struggled on the day. Ghalemdi Hydro Ltd, Panchthar Power Company Ltd, Universal Power Company Ltd and Himal Power Partner Ltd suffered losses of around 4% apiece. Everest Bank Ltd’s shares also fell 3.58% after the commercial bank reported a 51% decline in its first quarter earnings. The drop in profit is mainly attributed to a significant decline in its net interest income. Besides, mainly energy stocks came under pressure.

On the technical front, the equity index formed a small bullish candlestick suggesting slightly neutral sentiment in the current context. Despite the index breaching its resistance, a major breakout is yet to be observed. If the index manages to hold ground above the 1,650 points mark, the index is likely to extend its bullish move further. A firm correction on the other hand can see the index test its support at 1,600 point’s 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)

www.arkscapitaladvisors.com

 
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