Benchmark index up 10 points 

KATHMANDU, Sept 12: While the local bourse began this week’s trading with weakness, buyers gained control in the latter part of the review period to finish the week with a slight gain. On Sunday, the Nepal Stock Exchange (Nepse) index fell more than 10 points to end marginally below 1,500 points. Selling pressure extended to Monday’s trading contributing to another 12 points dip in the benchmark. Nonetheless, stocks maintained a firm footing on Tuesday as the index recouped more than 7 points in the session.Wednesday and Thursday saw gains of more than 13 points and 12 points, respectively. Consequently, the Nepse index ended the week at 1,520.69 – up 10.27 points or 0.68% against the prior week. 

Extending its gaining streak for a third straight week, the stock market hit its highest weekly closing level in post lockdown trading. Hence, investors remain firmly bullish in the present context. With liquidity pouring into the equity market, demand for volatile stocks have skyrocketed in the past couple of weeks driving the equity market to new heights. While fundamentals of listed companies have not changed much and the economy is yet to revert back to track, stock market has been seeing high optimism, which has also been the case in the world markets after hitting pandemic bottoms. Turnover was recorded at over a hefty Rs. 11 billion mark.  

Sensitive index, however, underperformed, as a result of subdued demand for highly weighted banking stocks and other stable companies. As a result, the corresponding average fell 1.10%. On the sectoral front, while most of the segments ended the week in green, banking and hotels stocks took a hit. Banking sub-index closed down by 2.14% and Development Bank sub-index fell 1.09%. Hotels and Mutual Fund sectors posted 1.09% and 0.28% declines. Trading stocks led the week’s charge surging by over 14%. Non-Life Insurance sub-index also rallied 7.60%. Microfinance and Life insurance sectors closed over 3% higher each. All other sectors closed the week in positive territory. 

In the news, the regulatory body relaxed prohibitory orders in the valley from Thursday permitting for vehicle movement based on odd-even rule. Similarly, select businesses and services are also allowed to open on specific dates and times. However, with economic recovery to normalcy still farfetched, the performance of the stock market for the long term remains uncertain.

As per ARKS technical analysis, despite closing higher for the week, the chart marked a bearish candlestick as the market closed below its opening level. Nonetheless, technical indicators show a strong signal for possible upward movement if the index manages to hold ground over 1,500 point’s mark. The index also trades firmly above 5,20 and 50 week Exponential Moving Averages (EMAs) which reflects notable uptrend in action. Some resistance can be seen at 1,560 points level where the index can pull back in the coming sessions. On the other hand, its breach can see the index climb towards February’s high at around 1,600 point’s mark. 

This column is produced by ARKS Capital Advisors Ltd

www.arkscapitaladvisors.com

(Views expressed in the article are those of the producer and do not necessarily reflect those of thispublication)

 
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