KATHMANDU: Nepali stocks saw one of its best weeks as the Nepal Stock Exchange (Nepse) index closed in green in all five trading sessions. Upbeat trading was visible from the very beginning as Sunday was marked by a gain of over 19 points. Subsequently, the index shot up by over 34 points on Monday followed by a slightly subdued trading on Tuesday where the index added modest 2 points. Nonetheless, the index stretched its gaining streak in the remaining trading sessions with advances of 5 points and 29 points on Wednesday and Thursday, respectively. Consequently, the week's gain totaled to 89.98 points or 6.69% as Nepse ended at 1,434.58 points.
With the advance, Nepse extended its gaining streak to four straight weeks where the index added roughly 140 points in total. Nepse has continued to shoot up with only minor hiccups in between. Investors, meanwhile, continued to flock into the market collecting shares of almost all sectors with many expecting this year's recovery to be a major one which can finally provide respite from the persisting three and a half years of downtrend. Furthermore, with heavyweight banks yet to take off compared to other segments, banking segment is also seeing upbeat trading in the recent sessions. Hence, rally of the banking stocks will be pivotal in driving the bourse in the direction of fresher highs. Weekly volume also shot up to record level. Over Rs 11 billion worth of securities were traded in the week on review.
Further, decreasing interest rates among banks and financial institutions (BFIs) has also had a major impact in the equity market with investors pouring in money in the exchange. This in turn has helped boost the psychology of the investors, keeping the momentum from subsiding substantially.
Mirroring the broader market, Class 'A' stocks saw considerable strength. Sensitive Index surged 5.7%. In terms of sector wise performance, all traded segments closed the week in green. Non-Life Insurance and Microfinance scrips were the best performers of the week leading the advances with gains of 14.66% and 13.52%, respectively. Manufacturing & Processing and Life Insurance segments also shot up by over 10% each. Besides, Trading sector rose 6.54% followed by heavyweight Banking segment which climbed over 5%. All other sectors saw upbeat movements.
Technical analysis by ARKS presents the market forming strong bullish candlestick in the weekly timeframe. The massive gain helped the equity index breach a strong resistance at around 1,350 points level making way for the index to make new highs. Rising Relative Strength Index (RSI) and upwards tilted Moving Average Convergence Divergence (MACD) line both confirm notably bullish sentiment prevailing of late. On a more upbeat note, the recent rally has been continuously backed by heavy turnovers. However, the surge can also see the market make minor retracements where further long positions can be taken, especially in commercial banks, development banks and finance segments.
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)