Daily Market Commentary

Stocks unchanged in range-bound trading

Published On: June 20, 2019 04:00 AM NPT By: Republica

KATHMANDU, June 20: Market opened for trading on an upbeat note on Wednesday and climbed higher initially. However, a sharp decline followed, dragging the index to red by midday. Stocks turned choppy thereafter and the Nepal Stock Exchange (Nepse) index closed essentially flat at 1,258.46 points.

After losing values continuously in the first half of June, the sell-off has shown some signs of easing off. Nepse has closed near 1,260-point mark for four straight sessions indicating the market holding ground in the current level. Nonetheless, indecisiveness still prevails in the bourse as reflected by restrained trading sessions witnessed of late. Market participation dropped further with the exchange recording a below par turnover of Rs 304 million.

Sub-indices turned in mixed performance contributing to the modest movement of the broader index. Among gainers, Finance sub-index climbed up by 0.47 percent, while Development Bank and 'Others' sub-indices advanced by 0.34 percent each. Manufacturing & Processing and Life Insurance sub-indices also edged higher. On the other hand, Non-Life Insurance sub-index was down by 0.57 percent, while Mutual Fund sub-index also shed 0.31 percent. All other sub-indices closed marginally lower.

Shares of NIC Asia Bank Ltd were traded the most as Rs 21 million worth of shares of the commercial bank changed hands on the day. Next on the list were Prabhu Bank Ltd and Nepal Bank Ltd with respective turnovers of Rs 20 million and Rs 18 million. Nepal Investment Bank Ltd Promoter Share, Taragaon Regency Hotels Ltd and Nepal Life Insurance Company Ltd were among other active stocks of the day.

Among advances, Multipurpose Finance Company Ltd turned in the best performance of the day. The finance company's share price hit the upper circuit of 10 percent on the day. Unnati Microfinance Bittiya Sanstha Ltd and Kalika Power Company Ltd saw their share prices rise by 6.51 percent and 5.43 percent, respectively. Ganapati Microfinance Bittiya Sanstha Ltd, Shangrila Development Bank Ltd and Arun Kabeli Power Ltd followed suit.

On the other hand, shares of Ghalemdi Hydro Ltd came under significant pressure posting a decline of 3.57 percent. Similarly, share prices of Samata Microfinance Bittiya Sanstha Ltd, Civil Laghubitta Bittiya Sanstha Ltd and Nepal Hydro Developers Ltd's struggled and closed over 3 percent lower each. Other losing securities include Dibyashwori Hydropower Ltd, Samudayik Laghubitta Bittiya Sanstha Ltd and National Microfinance Bittiya Sanstha Ltd.

ARKS technical analysis indicates the market forming a doji candlestick as the index failed to show any concrete movement toward either side. Hence, the selling pressure has subsided slightly in the current scenario and the index is showing some signs of consolidation in the current support range at around 1,250-1,260 points. Nonetheless, overall sentiment still remains bearish. Hence, investors are suggested to take cautious stance unless the market shows a notable sign of a rebound supported by transaction volume.

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