Daily market commentary

Stocks rally erasing four-day losses

Published On: February 16, 2021 05:55 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Feb 16: Stocks witnessed a sharp rally in the morning with the benchmark reaching as high as 2,565 mark. A minor correction saw the Nepse index erase some of its morning gains. However, strength in the latter trading hours pushed the index higher. Following a steady surge until the closing bell, Nepse closed Monday’s session with 92.42 point’s gain at 2,586.01.

The local equity market saw some selling pressure from prior week as most of the sectors witnessed correction on profit booking. Further, investors also took a cautious stance ahead of NRB’s monetary policy review. Nonetheless, with the monetary policy review indicating no major changes affecting the stock market, massive optimism was seen in the share market. Total turnover also crossed Rs. 10 billion mark.

All sectors closed the day firmly higher. Microfinance segment, which tanked sharply in the past couple of sessions, saw considerable buying pressure. The group’s sub-index rose 8.74%. Life Insurance, Hydropower, Non-Life Insurance, Banking and ‘Others’ segments also closed over 3% higher.

Nirdhan Utthan Laghubitta Bittiya Sanstha Ltd was the most actively traded stock with a turnover of Rs. 705 million. Nabil Bank Ltd followed suit with a turnover of Rs. 680 million. Chhimek Laghubitta Bittiya Sanstha Ltd, Deprosc Laghubitta Bittiya Sanstha Ltd and Global IME Bank Ltd followed suit with turnovers of Rs. 479 million, Rs. 474 million and Rs. 469 million. NIC Asia Bank Ltd, Neco Isnurance Ltd and Nepal Bank Ltd were the other active stocks of the day.

Mainly microfinance stocks dominated the list of top advances. More than 30 stocks, including microfinance, hydropower and insurance stocks, remained locked in the upper circuit limit of positive 10%. Chhimek Laghubitta Bittiya Sanstha Ltd, Grameen Bikas Laghubitta Bittiya Sanstha Ltd and Mithila Laghubitta Bittiya Sanstha Ltd were among the major gainers.

On the other hand, Panchakanya Mai Hydropower Ltd lost 4.03%, while Rairang Hydropower Ltd fell 0.35%. Besides, few debenture came under pressure and closed in red.

In terms of ARKS technical analysis, the market formed a strong bullish candlestick reflecting massive buyer enthusiasm on Monday. The index will most likely test resistance at the psychological 2,600 mark in the following session where the index’s reaction will be crucial in gauging possible movements of the market. A failure to breach the aforementioned mark can point towards possibility of some consolidation. Nonetheless, overall uptrend in the secondary market has still remained intact. 

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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