Daily market commentary

Stocks rally as Nepse gains 18 points

Published On: December 24, 2019 10:23 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Dec 24: Stocks saw strength since the beginning of Monday's trading session. The Nepal Stock Exchange (Nepse) index shot up more than 10 points to 1,160 points in the afternoon before retracing slightly. Nonetheless, a second rally toward the close hours pushed the Nepse index higher by almost 17.77 points at 1,168.58 points.

After seeing a choppy trade on its first trading day of the week, Nepse witnessed a rebound from the crucial 1,150 points. The market had witnessed some consolidation in the previous week with profit-booking prevailing after a rally seen earlier this month. Hence, the market has seemed to hold ground with further downfall unlikely. Market participation also improved on the day as turnover shot up by almost 60% to Rs 596 million.

All major sectors ended the day higher. Only Mutual Fund sector suffered minor loss. Manufacturing & Processing segment led the gains mainly due to surge in share price of Shivam Cements Ltd. 'Others' sub-index also saw major strength driven by a rally seen in Citizen Investment Trust's shares. The sub-indices of both the segments were up by around 5%. Non-life Insurance and Insurance segments also closed over 3% higher. Subsequently, Trading, Hotels and Finance sub-indices posted gains of over 2% each. Meanwhile, Banking sub-index inched 0.32% higher. 

In terms of market activity, Shivam Cements Ltd topped the list of actives with more than Rs 58 million worth of shares traded. Next, Nabil Bank Ltd and Nepal Bank Ltd registered transactions of Rs 50 million and Rs 47 million, respectively. Nepal Credit and Commerce Bank Ltd logged turnover of Rs 37 million after the bank announced to distribute 15% stock dividend for FY2018/19. Citizen Investment Trust, NMB Bank Ltd and Himalayan Distillery Ltd were among other active stocks of the day.

Six stocks remained locked to the upper circuit on the day led by Citizen Investment Trust whose share price jumped by 10%. Similarly, Hydroelectricity Investment and Development Company Ltd, Support Microfinance Bittiya Sanstha Ltd, Shivam Cements Ltd, Gurans Laghubitta Bittiya Sanstha Ltd and Shrijana Finance Ltd saw their share prices surge by over 9%. Hydroelectricity Investment and Development Company Ltd and Shrijana Finance Ltd have announced to distribute 12% cash dividend and 15% bonus shares, respectively, for FY2018/19. United Insurance Co Ltd, Asha Laghubitta Bittiya Sanstha Ltd and IME General Insurance Ltd also saw significant strength on the day.

On the other hand, Panchthar Power Company Ltd suffered the heaviest loss. Its share price tanked over 7%. Other energy stocks followed suit as Dibyashwori Hydropower Ltd and Khanikhola Hydropower Co Ltd saw their share prices fall by 3.7% each. Furthermore, share prices of Tinau Mission Development Bank Ltd, Kalika Power Company Ltd and Arun Valley Hydropower Company Ltd closed fell by more than 2%.

ARKS technical analysis indicates the market forming a bullish marubozu candlestick on the daily timeframe, reflecting notable buying pressure in the session. The index has posted a bounce from its crucial support at around 1,150 points which might see the market extend gains further. Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) also indicate bulls gaining momentum. A minor resistance lies at 1,180 points. After its breach, the market can likely reach the 1,200-point zone.

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