Nepse benchmark index jumps 22 points as selling pressure subsides 

KATHMANDU, July 26: Stocks traded in green since the beginning of Sunday’s trading. After climbing over 12 points higher in the morning, the Nepal Stock Exchange (Nepse) index pulled back to its opening level. Nonetheless, stocks saw considerable strength after mid-day as most of the traded sectors advanced in the afternoon. At the close, Nepse settled at its intra-day high of 1,465.10 points – up 22.40 points compared to Thursday.

With the day’s gain, the index extended its Thursday’s gain as the selling pressure subsided notably. Besides, the market has continued to see significant turnover as investors continue to bet on lower interest rates, liquidity and economic recovery. While year-end financial results are still due for the majority of the companies and fundamentals are yet to be gauged by investors, the stocks market continues to reflect significant optimism. Almost Rs 2 billion worth of shares were traded on the first day of the week.

Insurance segments led the market as both Life Insurance and Non-Life Insurance sub-indices surged 4 percent. Heavyweight banks were also among the major contributors to Sunday’s gain. Banking sub-index climbed 1.32 percent. Meanwhile, Microfinance and Trading segments closed around 1 percent higher. Finance, Development Bank and Manufacturing & Processing segments also inched towards positive territory. On the other hand, Hydropower, Hotels and Mutual Fund sectors fell marginally.

Shares of Nepal Life insurance Company Ltd were traded the most. Over Rs 258 million worth of the insurer’s shares changed hands. Nepal Reinsurance Company Ltd followed suit with a turnover of Rs 199 million. The reinsurer had announced on Friday that it would not be distributing any dividends for the year 2018/19. NIC Asia Bank Ltd and Shikhar Insurance Company Ltd were also actively traded with turnovers of Rs 86 million apiece. NMB Bank Ltd, Himalayan Distillery Ltd and NIC Asia Laghubitta Bittiya Sanstha Ltd were among other top turnover stocks.

Among major winners, Mirmire Laghubitta Bittiya Sanstha Ltd and Taragaon Regency Hotel Ltd hit the upper circuit limit of positive 10 percent. Meanwhile, Joshi Hydropower Development Company Ltd recouped some of its losses after hitting all time low on Thursday. The energy scrip shot up by 8 percent. Sagarmatha Insurance Co. Ltd, Support Microfinance Bittiya Sanstha Ltd and Premier Insurance Company Ltd were the other major gainers of the session.

On the other hand, Best Finance Company Ltd fell 6.54 percent to Rs 100 per share. National Hydropower Company Ltd and Sunrise First Mutual Fund also struggled shedding over 3 percent on their respective prices. Other decliners include Samriddhi Finance Co. Ltd, Rasuwagadhi Hydropower Company Ltd, Everest Bank Ltd, Convertible Preference Share and Ngadi Group Power Ltd.

On the technical front, the market formed a bullish candlestick on the daily timeframe for a second consecutive day. With the formation of a bullish hammer on Thursday, a green candle has validated a rebound making way for the index to test its immediate resistance at 1,480-point mark. Meanwhile, technical indicators suggest momentum favoring bulls following mid-week correction in the week earlier. 1,420 points level provides support for the equity index, while the index has more room to the upside if it breaks the 1,480 points level.

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

 
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