Daily Market Commentary

Stocks tumble as lockdown fears grip investors

Published On: April 25, 2021 09:31 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, April 25: The local benchmark index fell almost 50 points within the first trading hours then attempted a recovery which failed miserably. Similarly, the index continued to struggle and traded in the red throughout the remaining trading hours. A steady downfall saw the index tumble 75.89 points on Sunday to settle at 2572.21.

Investors took a more aggressive selling approach fueled by rumors of possible strict lockdown on Sunday’s trading session, as coronavirus infections grew rapidly in the last week. Hence, the stock market remained under pressure on the day. Market participation was noteworthy with over Rs. 7.28 billion worth of securities being traded on the day. 

All the sectors ended the day in the red zone. Hotels and Tourism and Microfinance sub-indices came under pressure and dropped by 6.14% and 4.37% respectively. Trading, Finance, Non-Life Insurance, Microfinance and Investment segments saw losses and decline over 3% each. All other segments also closed in the lower note.

Shares of Nepal Infrastructure Bank Ltd and Jyoti Life Insurance Company Ltd were traded the most with a turnover of Rs. 395 million and 338 million respectively. Upper Tamakoshi Hydropower Company Ltd, Nabil Bank Ltd and NIC Asia Bank Ltd turnovers of Rs. 259 million, Rs.209 million and Rs.205 million, correspondingly. Kumari Bank Ltd, Nepal Life Insurance Company Ltd, Nepal Credit and Commercial Bank Ltd and Nepal Reinsurance Company Ltd were among other heavily traded stocks.

Mahila Laghubitta Bittiya Sanstha Ltd and Bishal Bazar Company Ltd led the list of gaining stocks with an almost 10% surge in their share prices. Kalika Power Company Ltd and Mirmire Microfinance Development Bank Ltd shot above 3% each. Likewise, Goodwill finance co. Ltd and NMB Hybrid Fund-1 were the other gaining scrips for the day. 

On the other hand, Chandragiri Hills Ltd and Narayani Development Bank Ltd suffered the most as the stocks dropped above 8.43% and 8.19% respectively. Ridi Hydropower Company Ltd, Union Hydropower Company Ltd fell above 7% each followed by the shares of Oriental Hotels Ltd and Sanjen Jalabidhyut Company Ltd which plummeted over 6% apiece. Samriddhi Finance Company Ltd, Guheshwori Merchant Bank, and Finance Co. Ltd, Civil Laghubitta Bittiya Sanstha Ltd and Union Modi Hydropower Ltd were the other major losers with declines of over 5% each. 

As per the ARKS technical analysis, the index formed a strong bearish candlestick as the index closed below the psychological 2,600 level. Hence, further correction in the week is likely. The index’s reaction at 2,500 marks will be crucial for gauging the further direction of the market. Momentum indicators also reflect sellers’ dominance of late. 

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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