KATHMANDU, Aug 26: Following a four-day rally in the local stock market, stocks continue to see notable strength with the Nepal Stock Exchange (Nepse) index adding another 21.1 points on Wednesday. Strength was seen since the beginning of the day’s session as Nepse hovered in green for most of the early trading hours. Further, a rally ensued after mid-session driving the benchmark around 30 points higher at 1,470 in the afternoon. A pullback finally saw the index end session at 1,462.04 points.
Stretching its gaining streak for a fifth straight session, the local bourse has collected over 70 points since Thursday last week. Hence, the market is yet to show any sign of losing steam. Turnover has shot up sharply in the past few sessions. Over Rs 2.65 billion worth of shares were traded on Wednesday. Market participation has also remained upbeat as investors are approaching the market with much confidence of late as compared to the past week.
‘Others’ and heavyweight banking segments outperformed all other indices on the day. Sub-index of the former surged 2 percent, while that of the latter jumped 1.91 percent. Further, Microfinance, Mutual Fund, Development Bank and Hydropower sub-indices registered gains of over 1 percent each. All other sectors ended in the green zone, barring Life Insurance and Trading segments which fell marginally.
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Nepal Reinsurance Company Ltd has continued to lead the tally of active stocks. The reinsurer’s shares saw a massive turnover of Rs 349 million. Neco Insurance Company Ltd and Nepal Life Insurance Company Ltd followed suit as the respective scrips logged in turnovers of Rs 138 million and Rs 125 million. NIC Asia Bank Ltd, Surya Life Insurance Company Ltd and NMB Bank Ltd were the other actives of the day.
Shares of NRN Infrastructure and Development Company Ltd commenced its trading on the exchange on Wednesday with a first day rally of 10 percent. Nepal Finance Ltd followed suit with a gain of over 7 percent. Nepal Reinsurance Company Ltd and Swabhimaan Laghubitta Bittiya Sanstha Ltd, meanwhile, closed over 5 percent higher each. Prabhu Bank Ltd, Prudential Insurance Company Ltd and Sanima Bank Ltd were the other major gaining scrips of the day.
On the other hand, Samriddhi Finance Company Ltd pulled back sharply for a second straight day. On Wednesday, its share price tumbled 9.79 percent. Next, Guheshwori Merchant Bank & Finance Co. Ltd suffered a loss of 4 percent, followed by Ankhu Khola Jalavidhyut Company Ltd that fell 3.64 percent. Few other energy stocks also struggled with Arun Kabeli Power Ltd and Joshi Hydropower Development Company Ltd closing down by over 3 percent each.
On the technical front, the index extended its gains with a formation of bullish candlestick on the daily timeframe. Despite a last hour retracement, the breach of the 1,430-1,440 points’ zone suggests buyers significantly dominating the equity market. The index also made a fresh high for the month of August suggesting a short-term uptrend in action. While some retracement can be expected at the current level, the overall momentum favors bulls as also reflected by technical indicators like Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD).
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)
www.arkscapitaladvisors.com
