KATHMANDU, Jan 30: The Nepal Stock Exchange (Nepse) opened week with a notable gain with the benchmark rallying over 5-points on Sunday. Strength in the equity market carried over to Monday’s trading where Nepse rose another 16 points. Stocks swung between losses and gains thereafter. The index fell almost 18 points on Tuesday but recouped those losses on Wednesday. However, sellers prevailed in the last trading day of the week with the index falling 16.55 points. Consequently, the index closed the week 50.66 points or 2.13% higher at 2,425.30.
Stocks have witnessed one of its best month so far, with Nepse rallying over 300 points in January. Liquidity and interest rates have been the major driving force for the index’s recent surge. With more investors entering the market and volumes rising, the steady uptrend has sustained for more than 3 months. Weekly market activity also shot up to all-time high with total turnover of Rs. 44 billion. Meanwhile, most banking stocks published their earnings result in the week with the overall performance remaining mixed. Hence, investors approached banking stocks with caution in the week.
Sensitive Index bucked the trend and dropped 0.79% reflecting weakness in Class ‘A’ stocks. Sectors on the other hand, ended mixed. Non-Life Insurance stocks were the leaders with the segment closing over 9% higher. Life Insurance and ‘Others’ sub-indices rose 6.22% and 5.24%. Microfinance, Manufacturing & Processing and Hotels sub-indices also ended the week in green. On the other hand, Development Bank sector fell 3.09% followed by Trading group which dropped 1.58%. Mutual Fund, Banking, Finance and Hydropower sub-indices edged marginally lower.
Nepal Life Insurance Company Ltd’s shares were traded the most in the review period. Over Rs. 4.23 billion worth of the life insurer’s shares changed hands. Nepal Bank Ltd, Nepal Reinsurance Company Ltd and Shikhar Insurance Company Ltd posted turnovers of Rs. 1.36 billion, Rs. 1.22 billion and Rs. 1.15 billion. Nepal Telecom Ltd, NIC Asia Bank Ltd and National Life Insurance Company Ltd also witnessed turnovers of over Rs. 1 billion each.
In terms of ARKS technical analysis, the equity market formed a small bullish candlestick on the weekly timeframe. While the momentum showed sign of easing in the latter part of the week, the overall sentiment still remains bullish as reflected by technical indicators. Some uncertainty can be expected in the coming week with next week’s movement crucial for determining direction of the equity market.
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)