Daily Market Commentary

Stocks erase prior day losses, but turnover remains low

Published On: May 10, 2021 09:51 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, May 10: The equity market witnessed slight selling pressure in the morning as the Nepal Stock Exchange (Nepse) index fell around 10 points initially. Nonetheless, stocks saw upbeat movement thereafter with the benchmark trading more than 12 points higher around mid-day. The index continued to advance in the latter part of the afternoon and closed near its session high at 2,645.85. Monday’s gain stood at 27.41 points. 

Following marginal dips in the past couple of sessions, stocks found some footing in the session. However, turnover fell as investors took cautious stance amidst ongoing parliament’s vote of confidence on Prime Minister KP Sharma Oli. The bourse saw a transaction of Rs. 4.2 billion against recent daily average turnover of over Rs. 6 billion. 

All sectors ended in green, nevertheless. ‘Others’ stocks led the day’s gains as the respective sub-index jumped 3.93%. Non-Life Insurance and Manufacturing & Finance sectors also rose 2.64% and 2.37%. Investment and Microfinance groups, meanwhile, climbed around 1% each. All other composite indices registered marginal gains.

Shares of Nepal Reinsurance Company Ltd were traded the most as more than Rs. 270 million worth of the Reinsurer’s shares changed hands. Upper Tamakoshi Hydropower Ltd and Hydroelectricity Investment and Development Company Ltd were the over heavily traded scrips of the day with turnovers of Rs. 197 million and Rs. 181 million, respectively. Himalayan Distillery Ltd, Mahila Laghubitta Bittiya Sanstha Ltd, Shivam Cements Ltd and Nepal Infrastructure Bank Ltd were the other top turnover stocks. 

Rastriya Beema Company Ltd, Samata Gharelu Laghubitta Bittiya Sanstha Ltd and Ru Ru Jalbidhyut Pariyojana Ltd saw significant strength and remained locked in the upper circuit of positive 10%. Guheshwori Merchant Bank & Finance Co. Ltd shot up by 6.75%, Liberty Energy Company Ltd rose 5.14% and Nepal Reinsurance Company Ltd added 4.91%. Synergy Power Development Ltd, Mahila Laghubitta Bittiya Sanstha Ltd, Barun Hydropower Co. Ltd and Shivam Cements Ltd were the other major gainers. 

Conversely, Bishal Bazar Company Ltd extended its freefall with another 10% decline. Joshi Hydropower Development Company Ltd and Chhyangdi Hydropower Ltd followed with declines of 4.12% and 3.14%. Mero Microfinance Bittiya Sanstha Ltd, Singati Hydro Energy Ltd, Dibyashwori Hydropower Ltd and Swabhimaan Laghubitta Bittiya Sanstha Ltd’s shares also came under considerable pressure.

As per the ARKS technical analysis, the index formed a bullish candlestick on the daily timeframe suggesting buyers prevailing in Monday’s session. Though the index found footing above 2,600 mark, low volumes indicate that a further confirmation is required before taking any major long position. Technical indicators also suggest neutral sentiment in the current context. Support is provided by 2,600 psychological level.

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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