Daily Market Commentary

Stocks pull back slightly after ending higher for six straight days

Published On: April 7, 2021 08:24 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, April 7: The Nepal Stock Exchange (Nepse) index traded in the green in the morning before dropping towards red briefly at mid-day. The benchmark saw a recovery in the afternoon pushing the index over 2,690. However, profit-booking in stocks pulled the bourse towards negative territory with the index closing Wednesday’s session at 2,671.62 – down 2.85 points against the previous close.

After making a fresh high on Tuesday, the market lost steam on Wednesday with the index ending slightly lower. Turnover also fell slightly on the day as some indecision prevailed. Over Rs. 7.2 billion worth of shares changed hands.

Sectors ended mixed contributing to the modest movement of the stock market. Trading sub-index extended its correction and closed 3.94% lower. Investment, Non-Life Insurance, Manufacturing & Processing and Hydropower sectors suffered losses of over 1% each. ‘Others’ and Life Insurance sectors also ended lower. In contrast, Hotels and Tourism group shot up by 6%. Microfinance and Development Bank sectors saw strength and climbed 2.16% and 1.5%. Mutual Fund, Banking and Finance sectors inched marginally higher.

Nepal Infrastructure Bank Ltd and Chilime Hydropower Company Ltd were the day’s active stocks. The respective stocks posted turnovers of Rs. 280 million and Rs. 223 million. Chhimek Laghubitta Bittiya Sanstha Ltd, Womi Laghubitta Bittiya Sanstha Ltd and Nepal Telecom Ltd also saw transactions of Rs. 195 million, Rs. 185 million and Rs. 161 million.

On the gainers front, Mahila Laghubitta Bittiya Sanstha Ltd, Chandragiri Hills Ltd, NIC Asia Laghubitta Bittiya Sanstha Ltd, Reliance Finance Ltd and Universal Power Company Ltd rallied to hit the upper circuit limit of positive 10%. Khani Khola Hydropower Company Ltd, Jyoti Life Insurance Ltd, Himal Dolakha Hydropower Company Ltd closed around 7% higher.

Conversely, Rairang Hydropower Development Company Ltd’s shares suffered the biggest loss of the day closing over 7.26% lower. United Idi Mardi RB Hydropower Ltd and Sanima General Insurance followed suit with losses of 6.06% and 5.24%. Salt Trading Corporation, Ngadi Group Power Ltd, Panchthar Power Company Ltd and Sanima Mai Hydropower Ltd were among other major losers with declines of over 4% apiece.

As per the ARKS technical analysis, the index formed a small bearish candlestick reflecting loss of momentum of late. With the index making fresh high on Tuesday, the market is showing signs of consolidation. Technical indicators, however, shows sentiment favoring bulls in the present context. An immediate support lies at 2,600 mark.

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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