Daily market commentary

Stocks post rough start to the week

Published On: September 9, 2019 10:52 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Weakness from the previous week carried over to the first trading day of the week. The Nepal Stock Exchange (Nepse) index witnessed a steady decline throughout Sunday's trading hours. 

The constant selling pressure saw the equity index dip as low as 1,176 points late in the afternoon. Following a minor recovery in the closing minutes, Nepse closed at 1,178.46 points – down 12.61 points against the session earlier.

In the previous week, the index tumbled to intraday low of around 1,156 points before making a notable recovery to almost reach 1,200 points towards the week's close. However, some selling pressure is still visible with the index seeing modest losses in the past couple of sessions. Hence, the market will most likely trend in the consolidation zone of around 1,150 points to 1,200 points mark before showing any significant moves towards either side.  

Market participation, meanwhile, continued to remain on the lower side of the spectrum. Only Rs 305 million worth of shares were exchanged on the day.

All major sectors turned red weighing on the broad index's movement. Non-life insurance and Life Insurance sub-indices suffered the most with losses of 2.21% and 1.59%, respectively. Hydropower, 'Others', Banking and Development Bank sub-indices followed with losses of over 1% each. All other sectors saw modest losses in the session.

In terms of market activity, more than Rs 52 million worth of Prabhu Bank Ltd Promoter Shares changed hands. Further, ordinary shares of NIC Asia Bank Ltd, Prabhu Bank Ltd and Nepal Life Insurance Company Ltd saw turnovers of Rs 16 million, Rs 13 million and Rs 11 million, respectively. Kumari Bank Ltd posted a turnover of Rs 9 million. The commercial bank called for its Annual General Meeting (AGM) to be held on September 28. Approval of 10% bonus shares is among its key agendas.

Among advances, Adhikhola Laghubitta Bittiya Sanstha Ltd turned in the best performance of the day hitting the upper circuit of positive 10%. Janaki Finance Ltd's shares also rallied over 5% after the class 'C' financial institution announced 22% stock dividend to its shareholders from Fiscal Year 2018/19's earnings. Similarly, Radhi Bidyut Company Ltd climbed over 4%. Besides, Sanima Equity Fund and Goodwill Finance Co. Ltd posted gains of over 2% each.

Energy stocks were among the biggest losers of the day. Panchthar Power Company Ltd and United Power Company Ltd tanked over 8% each. Next, shares of Sindhu Bikash Bank Ltd tumbled 7% followed by shares of National Life Insurance Company Ltd which closed over 6% lower. 

Union Hydropower Ltd, Ankhu Khola Jalvidhyut Company Ltd, Kalika Power Company Ltd and Himalayan Urja Bikas Company Ltd were the other major decliners of the day.

As per the ARKS technical analysis, the index formed a bearish candlestick on the daily timeframe. Despite the index's attempt to rebound, the gains have been truncated with losses coming in two straight sessions. Technical indicators also indicate the market losing momentum slightly. Hence, the index's movement must be closely monitored where a drop below 1,156 mark will suggest further downward movement. On the other hand, the breach of resistance at 1,200 points might substantiate a rebound.

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)

Leave A Comment