Daily market Commentary

Stocks make a recovery as selling pressure subsides

Published On: October 6, 2021 09:00 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Oct 6: Stocks saw upbeat trading throughout Tuesday’s session. The equity index rose more than 30 points in the morning before making a small pullback. The bourse held its footing in green, nonetheless, continuing to advance in the latter trading hours. At the close, Nepse was up 41.84 points to end at 2,612.65. 

Despite the recent losing streak, investors have found respite with dipping volumes which marks diminishing selling pressure. Further, some recovery was also seen in the equity market ahead of the holidays. Daily turnover was lowest in the year till date. Day’s turnover stood below Rs. 3 billion mark. 

Only the Trading segment ended in red. Biggest gains came from the Finance sector which rose more than 4%. The Development Bank sub-index also jumped 3.12%. Microfinance, Non-Life Insurance, Hydropower and Life Insurance sub-indices closed more than 2% higher. All other sectors ended in green. Heavyweight banks climbed 1.02%. 

Mero Laghubitta Bittiya Sanstha Ltd was traded the most after the micro sector lender announced a 20% stock dividend to its shareholders. Over Rs. 118 million worth of the stock changed hands. Himalayan Distillery Ltd, Citizens Bank International Ltd, Nabil Bank Ltd and Ridi Hydropower Development Company Ltd were among other actively traded stocks.

Himal Power Partner Ltd, Multi Purpose Finance Ltd and Samata Laghubitta Bittiya Sanstha Ltd rallied exactly 10% apiece. Mailung Khola Jalvidhyut Company Ltd, Civil Laghubitta Bittiya Sanstha, Chhyangdi Hydropower Ltd and Janautthan Samudayic Laghubitta Bittiya Sanstha Ltd also rallied over 9% apiece. 

NIC Asia Laghubitta Bittiya Sanstha Ltd plunged sharply after the microfinance announced a 5.41% cash dividend for the year 20/21. Reliance Life Insurance Ltd also fell on 5.26% dividend amount. Mountain Energy Nepal Ltd, Salt Trading Corporation and Ridi Hydropower Development Company Ltd fell more than 2% apiece. Green Development Bank Ltd, Sanima Mai Hydropower Company Ltd and Siddhartha Bank Ltd fell marginally. 

As per the ARKS technical analysis, the index formed a small bullish candlestick as the index climbed back above the 2,600 mark. Momentum indicators still favor bears in the current context. However, with bullish divergence seen in RSI indicators, selling pressure is showing signs of subsiding of late. Hence, a rebound and a breakout above the short term downtrend line at 2,700 can see the index resume its upside move. 

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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