Daily market commentary

Stocks extend slide but losses shrink

Published On: March 19, 2020 10:28 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Following a sharp loss in the morning, the benchmark Nepal Stock Exchange (Nepse) index gave up almost 40 points initially and plateaued for most of the afternoon. Bulls gained control thereafter as most of the stocks trimmed losses to trade briefly in green. However, selling pressure in the final trading hour saw the index register a loss of 16.26 points to close Wednesday's trading at 1,255.80. 

After losing almost 45 points on Tuesday, selling pressure persisted in the bourse with the index stretching week's losses further. With the decline, the index has fallen over 375 points from its February end high as the index is on the verge of registering its worst month ever. Consequently, investor fear is far from over as market participants remain hesitant to enter the market as COVID-19 outbreak continues to impact the global economy. As a result, turnover dropped further to Rs 1,184 million from Rs 1,465 million in the session earlier. 

In terms of sector-wise performance, all component segments closed the day lower barring Trading sector which rose 3.24%. Non-Life Insurance and Life Insurance sub-indices suffered the most and fell around 2% each. Banking, Hotels and Manufacturing & Processing sub-indices followed suit with losses of around 1% each. All other sectors saw moderate losses. 

Nepal Life Insurance Company Ltd continued to witness active market participation as over Rs 93 million worth of its shares changed hands. NIC Asia Bank Ltd and NMB Bank Ltd, subsequently, saw turnovers of Rs 83 million and Rs 59 million. Global IME Bank Ltd, Shivam Cements Ltd and Nabil Bank Ltd were among other actively traded stocks in the day. 

Shares of Janautthan Samudayic Laghubitta Bittiya Sanstha Ltd led the list of advances as the respective price closed almost 10% higher. The microfinance company announced its annual general meeting (AGM) to be held on April 9. Approval of 25% stock dividend is the company's main agenda among others. 

Next, Mountain Hydro Nepal Ltd jumped 8% on the day. Sabaiko Laghubitta Bittiya Sanstha Ltd and Nepal Investment Bank Ltd Promoter Share followed suit with advances of over 4% each. Nepal Insurance Co Ltd, Swabhimaan Laghubitta Bittiya Sanstha Ltd and Gurans Laghubitta Bittiya Sanstha Ltd were among other top gaining scrips of the day. 

On the other hand, Kalika Power Company Ltd struggled the most and tumbled over 9%. Next, Support Microfinance Bittiya Sanstha Ltd and NLG Insurance Company Ltd slumped around 6%. Multipurpose Finance Company Ltd, Siddhartha Insurance Ltd and Grameen Bikas Laghubitta Bittiya Sanstha Ltd were the other major losing securities.

ARKS technical analysis indicates the market forming a spinning top bearish candlestick on the daily timeframe. Despite bears remaining in control, some indecision was visible in the equity market as selling pressure has slightly eased off. Nonetheless, momentum indicators reflect the market stretching its short term downtrend with the index yet to show a sign of a significant rebound. Immediate support of the market lies at 1,200 points where investors must closely watch the index's movement to gauge further plausible movement of the index.

This column is produced by ARKS Capital Advisors Ltd
(Views expressed are those of the producer and do not necessarily reflect those of this publication)

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