KATHMANDU: The Nepal Stock Exchange (Nepse) index rallied sharply in the morning on Wednesday adding more than 25 points. The benchmark index neared 1,600 points at mid-session. Despite a brief correction, Nepse ended the day 50.93 points higher at 1,596.13 points.
With the index stretching its rally with only brief corrections, investors are persistently pouring in investments into the secondary market. The upbeat trading was supported by a broad rally with all traded sectors closing the day in green. The surge was accompanied by record breaking turnover as daily volume crossed Rs 4 billion for the first time in the history of the stock market. Nepse logged total transactions of Rs 4.15 billion on the day.
Leading the gains was Life Insurance sector which saw its sub-index shoot up by 6.12% as the sector leader Nepal Life Insurance Company Ltd saw notable northbound movement. Next, the sub-index of Manufacturing & Processing sector, driven by Shivam Cements Ltd and Himalayan Distillery Ltd, jumped by 4.63%. Banking and Hotels segments also saw considerable strength with their respective sub-indices closing higher by over 3% each. All other sectors closed the day higher.
Nepal Life Insurance Company Ltd was the most active stock of the day as its dividend announcement day is approaching nearer. Nearly Rs 220 million worth of the shares of the life insurer changed hands on the day. Shivam Cements Ltd and Nepal Bank Ltd followed suit with turnovers of around Rs 180 million each. Similarly, Himalayan Distillery Ltd posted turnover of Rs 167 million. Other insurance scrips like Neco Insurance Ltd, Nepal Insurance Co Ltd and Gurans Life Insurance Company Ltd were also high in demand.
Everest Bank Ltd Convertible Preference Share, Rastriya Beema Company Ltd and Unilever Nepal Ltd were the best performers of the day their respective unit prices hit the upper circuit of 10%. Unit prices of Kalika Power Company Ltd, Gurans Life Insurance Company Ltd and Rastriya Beema Company Ltd Promoter Share were also up by over 9% each.
On the flipside, Radhi Bidyut Company Ltd's share price by tanked 8.29%, while Arun valley Hydropower Company Ltd saw its share price slump 7.96%. Furthermore, Bottlers Nepal Terai Ltd and Ridi Hydropower Development Company Ltd posted declines of over 4% each. Swabhimaan Laghubitta Bittiya Sanstha Ltd, United Modi Hydropower Ltd and Mahila Sahaytra Microfinance Bittiya Sanstha Ltd were other major losing stocks of the day.
In terms of ARKS technical analysis, the market formed a strong bullish candlestick on the daily timeframe stretching this week's gains to over 160 points. The sentiment remains extremely bullish with the index hitting fresh highs. Technical indicators also suggest the index gathering further momentum making a major drop unlikely. The market might face some resistance at 1,600 points where a correction can be expected. Else a breach of the crucial mark will make way for the benchmark index to register further gains.
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)