Daily Market Commentary

Stocks tank firmly as quarter-end approaches

Published On: June 29, 2021 06:30 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, June 29: The Nepal Stock Exchange (Nepse) opened slightly higher and traded flat in the beginning trading hour. Stocks fell slightly at mid-day before making a modest recovery. However, stocks continued to remain under pressure as the bourse saw a steady decline till Tuesday’s close. Nepse ended the day with a 47.50-point dip at 2,828.

The equity market has continued to witness a broad sell-off since mid-June. With aggressive profit booking and selling pressure in finance, hydropower, and development bank stocks, the market continued to falter reaching close to the psychological 2,800 mark. Market participation has also dried up firmly with a turnover of below Rs. 7 billion. The recent dip can also be attributed to approaching quarter-end where interest and tax payments will be due for individuals and institutions.

Barring the Microfinance sector, which ended 0.50% higher, all segments closed in the negative territory. The finance and Development Bank sectors came under significant pressure and tumbled 4%. The investment sub-index also tanked 3.43%. Hydropower and ‘Others’ sub-indices closed more than 2% lower. All other sub-indices fell marginally.

Shares of Radhi Bidyut Company Ltd were traded the most following book closure for its bonus shares. Over Rs. 498 million worth of the energy scrip changed hands. National Hydropower Company Ltd’s shares were also actively traded. Over Rs. 367 million worth of the hydropower developer’s shares were traded. Nepal Insurance Company Ltd, Nepal Reinsurance Company Ltd, and Upper Tamakoshi Hydropower Ltd were among other actively traded shares.

Oriental Hotels Ltd bucked the trend as the stock price surged by 5.76%. Gurans Laghubitta Bittiya Sanstha Ltd and Samudayik Laghubitta Bittiya Sanstha Ltd also saw strength with advances of 4.25% and 3.66%. Taragaon Regency Hotels Ltd, Civil Laghubitta Bittiya Sanstha Ltd and Nirdhan Utthan Laghubitta Bittiya Sanstha Ltd also jumped more than 2% each.

Progressive Finance Ltd led the list of major decliners. The finance company’s share price plunged 8.55%. Hydroelectricity Investment & Development Company Ltd and Best Finance Company Ltd dipped more than 8%. Shree Investment & Finance Co. Ltd, Central Finance Company Ltd and Lumbini Bikas Bank Ltd followed suit with losses of around 7% each.

In terms of ARKS technical analysis, the market formed a strong bearish candlestick on a daily timeframe. With the index trending close to its support, the upcoming move of the market will be crucial in gauging the possible direction of the equity market on the short run. Further, with modest volumes in the sessions of late, the momentum remains in favor of the bears. Another immediate support lies at the 2,750 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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