Daily Market Commentary

Stocks give up morning gains to end Monday’s session slightly in red

Published On: May 3, 2021 07:55 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, May 3: The buying interest from prior trading session extended to Monday’s trading as the Nepal Stock Exchange (Nepse) index traded around 20 points higher in the beginning trading hour. However, a wave of selling pressure pushed the index towards negative territory where Nepse fell as much as 20 points in late afternoon. A small recovery at the closing minutes saw the benchmark close with a loss of 12.36 points at 2,652.75.

The bourse witnessed a small correction on Monday on the back of profit booking by traders. The index had gained more than 150 points in the prior 4 trading days giving many trades the opportunity to book short term gains. However, volume backed trading in two consecutive days suggest that the market is witnessing notable enthusiasm from both buyers and sellers. The bourse witnessed an above par turnover of Rs. 7.53 billion. 

All sectors witnessed losses on the day barring Microfinance and Investment groups, which added 1.29% and 0.50%. Losses came mainly from ‘Others’ stocks with the sub-index dropping 1.53%. Energy stocks also came under pressure and fell 1.23%. Development Bank and Manufacturing & Processing sub-indices also lost over 1% each. Heavyweight banks, meanwhile, declined 0.55% on average. 

Api Power Company Ltd’s shares were traded the most after the hydropower company received approval from Securities Board of Nepal (Sebon) to issue 29.38% right shares. The scrips registered a turnover of Rs. 394 million. Nepal Reinsurance Company Ltd and Grameen Bikas Laghubitta Bittiya Sanstha Ltd followed suit with turnovers of Rs. 297 million and Rs. 285 million. Hydroelectricity Investment and Development Company Ltd, Nepal Credit and Commerce Bank Ltd and Nepal Infrastructure Bank Ltd were among other actively traded shares. 

Shares of Bishal Bazar Company Ltd extended its rally hitting another positive circuit limit of 10%. Similarly, National Microfinance Bittiya Sanstha Ltd, Mahila Laghubitta Bittiya Sanstha Ltd, Ngadi Group Power Ltd and Singati Hydro Energy Ltd also shot up by almost 10%. Ru Ru Jalbidhyut Pariyojana Ltd, United Modi Hydropower Ltd and Radhi Bidyut Company Ltd were among other major gainers. 

On the other hand, Himalaya Urja Bikas Company Ltd, Rasuwagadhi Hydropower Company Ltd and Himal Power Partner Ltd struggled and posted declines of 3.58%, 3.34% and 3.29%. Janaki Finance Ltd, Sindhu Bikash Bank Ltd, Sanjen Jalavidhyut Company Ltd and Liberty Energy Company Ltd also saw considerable weakness and shed more than 2% each.

On the technical front, the index formed a small bearish candlestick reflecting minor correction after a 4-day rally. The index, nonetheless, is trading close to its all-time high suggesting bulls are still in control in the present context. A rebound from 2,500 level has validated the medium-term uptrend with the next resistance lying at 2,700. A pullback, on the other hand, can see Nepse test the immediate support at 2,600 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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