Daily Market Commentary

Stocks end Wednesday’s lackluster trading little changed

Published On: July 14, 2021 10:16 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 14: After opening more than 10 points higher, a deep correction dragged the benchmark equity index towards negative territory. Nonetheless, the broader market pared the early losses to trade along the opening level in the afternoon. Movements remained modest thereafter, with the index settling with a gain of 1.01 points at 2,872.05. 

After a volatile beginning to the week, trading range has tapered of late as investors remained reluctant to take any heavy positions towards either side. Nonetheless, the index has continued to make higher lows each day suggesting the balance tipping towards the buyer’s side. 2,800 has continued to act as a key level as the index has maintained ground above the psychological level despite the last month sell-off. Turnover, however, remained subdued as only Rs. 5.65 billion worth of equities changed hands.

Indecision in the overall equity market was also reflected in sector-wise performance as composite sub-indices ended mixed. Hydropower and Finance sectors saw strength and rose 2.71% and 1.48%, respectively. Investment, Mutual Fund and Hotels &Tourism sub-indices eked out modest gains. On the other hand, Non-Life Insurance and ‘Others’ segments dipped by around half a percent each. Microfinance, Trading and Banking sub-indices lost around 0.3%. All other sectors inched marginally lower. 

Shares of Gurkhas Finance Ltd were traded the most with a turnover of almost Rs. 30 million. Chhimek Laghubitta Bittiya Sanstha Ltd and Himalayan Distillery Ltd, next, logged in transactions of Rs. 223 million and Rs. 197 million. Nirdhan Utthan Laghubitta Bittiya Sanstha Ltd, Nepal Life Insurance Company Ltd and Nabil Bank Ltd were the other active stocks of the day.

Himal Power Partner Ltd and Nepal Finance Ltd were the day’s biggest advances with both scrips ending around 8% higher. Kalika Power Company Ltd, Rasuwagadhi Hydropower Company Ltd and Sanjen Jalavidhyut Company Ltd posted gains of 7.11%, 5.94% and 5.73%. Besides, mainly hydropower stocks closed the day in positive territory. 

Among major losers, Suryodaya Laghubitta Bittiya Sanstha Ltd and Prabhu Insurance Ltd dipped 2% apiece. Mahuli Samudayik Laghubitta Bittiya Sanstha Ltd, Ghalemdi Hydro Ltd, Goodwill Finance Company Ltd and Bishal Bazar Company Ltd followed suit with declines of over 1% each.

As per the ARKS technical analysis, the index formed a small spinning top candlestick suggesting extension of indecisive trading for a second day. Both buyers and sellers took a passive approach failing to drive prices notably towards any side. Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) indicate loss of bearish momentum. However, the index is yet to show any clear direction in the current juncture. Any major move towards either side supported by consecutive sessions of significant volumes will indicate the possible course of the equity market for the short run. 

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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