KATHMANDU: Nepal Stock Exchange (Nepse) index shot up by 18 points in the morning as strength carried over to Tuesday's trading. However, sellers took over the latter trading session with the index declining steadily to trade briefly in red in the last trading hour. A slight recovery toward the close meant the benchmark index ended the day 1.77 points at 1,400.01 points.
After a rally of over 55 points in three trading days, the index closed above 1,400 points mark for the first time in roughly 22 months. The recent rise was fueled mainly by heavyweight commercial banks adding to its gains whose movement is key in determining the course of market capitalization-based Nepse index. Development Bank sector also followed suit. However, the buying pressure remained a little subdued compared to Monday's trading session. In the meantime, breach of 1,400 points will be a crucial psychological event for the secondary market. The bourse might see more upbeat movement if the index manages to hold ground firmly above the current mark. Further, market activity crossed Rs 2 billion for a second day in a row, suggesting that the market is unlikely to lose steam any time soon.
Sectors witnessed mixed movement on the day. While few segments saw modest correction, remaining others ended the day in green. Mutual Fund sub-index added 1.96%. Manufacturing & Processing sector stretched its gaining streak with a 1.15% advance. Development Bank, Banking and Trading sub-indices also closed in positive territory. On the other hand, Hotels and Hydropower sectors led the losses dropping roughly 1.70% each. Finance, Life Insurance, Microfinance, 'Others;' and Non-Life Insurance segments also ended the day marginally lower.
Shares of NIC Asia Bank Ltd and NMB Bank Ltd were traded heavily in the market with total transactions of Rs 106 million and Rs 95 million. Himalayan Distillery Ltd and Shivam Cements Ltd were next o the list with turnovers of Rs 91 million and Rs 76 million, respectively. Nepal Life Insurance Company Ltd, Shine Resunga Development Bank Ltd and Shikhar Insurance Co Ltd were among other active stocks of the day.
Leading the gains was Kalika Laghubitta Bittiya Sanstha Ltd whose price shot up by 10% on the first day of joint trading after successful merger with Janasewi Laghubitta Bittiya Sanstha Ltd. The latter went for merger shortly after issuing Initial Public Offering (IPO) in May 2019. Likewise, share price of Ghalemdi Hydro Ltd rallied 9.52% to Rs 69 per share. Shine Resunga Development Bank Ltd also saw its share price jump by 7.17%, while share prices of Mountain Hydro Nepal Ltd, Rastriya Beema Company Ltd and Bottlers Nepal Terai Ltd closed up by over 4% each.
Shares of Laxmi Laghubitta Bittiya Sanstha suffered the most shedding over 5%. Panchthar Power Company Ltd, subsequently, saw its share price fall by 4.51%. Finance companies joined the list of major decliners as Central Finance Company Ltd, Guheshwari Merchant Bank & Finance Co Ltd and Nepal Finance Ltd posted losses of over 3% each. Nepal Seva Laghubitta Bittiya Sanstha Ltd, Sanima Equity Fund and NLG Insurance Company Ltd were among other losing scrips.
Technical analysis of ARKS suggests that the market witnessed some correction in the day following heavy gains on Monday and Tuesday morning. Consequently, the index settled closed to its opening level. Some indecision is evident but the outlook remains bullish. With formation of a Moving Average Convergence Divergence (MACD) bullish cross, the trend for the short term stays upbeat. Most importantly, the index is still in its psychological resistance mark of 1,400 points where the market might witness some consolidation. Hence, gauging the market's movement at this level can suggest a possible direction of the secondary market.
This column is produced by ARKS Capital Advisors Ltd
(Views expressed are those of the producer and do not necessarily reflect those of this publication)