Daily market commentary

Stocks inch higher amidst subdued market activity

Published On: December 30, 2020 06:00 AM NPT By: Republica  | @RepublicaNepal

Dec 30: The Nepal Stock Exchange (Nepse) index opened Tuesday’s session in green and saw strength in the beginning hours of the trading session. The benchmark climbed more than 24 points at mid-session but bears prevailed in the latter half of the session. A steady decline in the afternoon saw the index give up most of the earlier gains to close session at 2,012.89 – up5.57 points against the session earlier.

The index found some ground in the session earlier after a 3-day slump. However, gains have remained modest in the recent sessions as lack of conviction is still visible in the equity market. Turnovers have also dropped notably of late with only Rs. 4 billion worth of securities being traded on the day.

Traded sectors maintained negative bias despite broader market’s advance. Only 4 out of 12 segments ended the day in green. Manufacturing & Processing stocks outperformed as the group’s sub-index shot up by 4%. ‘Others’ sector also saw strength and rose 3.29%. Microfinance and Non-Life Insurance sectors edged slightly higher. On the other hand, Hydropower sub-index suffered the most with a loss of 1.18%. Development Bank and Banking sectors also suffered losses of 0.89% and 0.63%. All other segments saw marginal losses.

Nabil Bank Ltd led the list of active stocks with a turnover of Rs. 530 million. Shivam Cements Ltd and Global IME Bank Ltd’s shares followed suit with turnovers of Rs. 279 million and Rs. 235 million. Himalayan Distillery Ltd, Nepal Life Insurance Company Ltd and Nepal Reinsurance Company Ltd were the other top actively traded stocks.

Citizen Investment Trust and Narayani Development Bank Ltd led the list of gainers as both scrips hit the upper circuit limit of positive 10%. Himalayan General Insurance Co. Ltd’s shares rallied 7.50%. Shivam Cements Ltd and Himalayan Distillery Ltd also saw strength and added 5.67% and 4.86%. 10.50% SBL Debenture 2082, Asha Laghubitta Bittiya Sanstha and Nadep Laghubitta Bittiya Sanstha Ltd followed suit with gains of over 3% apiece.

Multipurpose Finance Company Ltd, on the other hand, witnessed the biggest percentage loss of the day. The stock price tanked 6%. Central Finance Company Ltd and Miteri Development Bank Ltd fell around 4% each. Other major decliners include United Idi Mardi RB Hydropower Ltd, Radhi Bidyut Company Ltd and Green Development Bank Ltd.

On the technical front, the index formed a doji candlestick on the daily timeframe suggesting indecision prevailing in the equity market. Further, with volumes remaining under par both buyers and sellers remained relatively passive. Though the selling pressure has subsided in the past couple of sessions, any major rebound is yet to be seen. Hence, the current trading points towards extension of sideways movement. Major support of the market can be taken as 1,900 mark, while 2,100 level is the immediate resistance.

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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