KATHMANDU, Nov 22: The local stock market opened Sunday’s trading firmly in green with the Nepal Stock Exchange (Nepse) index reaching as high as 1,810 points in the morning. A sharp pullback and a subsequent rally at mid-day saw the index hit 1,810-point mark for the second time in the day. However, the benchmark witnessed a steady decline in the latter trading hours on profit booking as the index dipped as much as 16 points in the late afternoon. A recovery towards the closing minutes saw the benchmark close with a gain of 4.69 points at 1,782.81 points.
Nepse witnessed a relatively volatile trading session as the index gyrated as much as 50 points with both buyers and sellers negating each other at the end of the day. While the stocks which have witnessed substantial rally corrected slightly, heavyweight banks helped the bourse stay afloat in green. Consequently, the buying pressure lost some steam as most of the sectors retraced in the day. Nepse also posted a record daily turnover of Rs 6.91 billion on Sunday.
Majority of the sectors maintained negative bias in the day, while Banking and Development Bank sub-indices rose 2.23% and 0.64%. ‘Others’ sub-index also inched higher. In contrast, Trading and Hotels sectors suffered the most. The respective sub-indices fell 5.69% and 3.99%. Non-Life Insurance, Life Insurance, Manufacturing & Processing and Mutual Fund segments also witnessed declines of over 2% each.
Nepal Reinsurance Company Ltd was the most actively traded scrip of the day. Over Rs 58 million worth of the shares changed hands. Nepal Life Insurance Company Ltd and Nepal Telecom Ltd’s shares also saw heavy transactions with turnovers of Rs 297 million and Rs 276 million. Himalayan Distillery Ltd, Nepal Bank Ltd, Prabhu Bank Ltd and Nabil Bank Ltd were the other top turnover stocks on Sunday.
Citizens Mutual Fund 2 led the list of major gainers. The unit price rose exactly by 10%. Janaki Finance Ltd also followed with a gain of 9.21%. Prabhu Bank Ltd and Nabil Bank Ltd were the leading commercial banks with both stocks surging close to 7%. Ajod Insurance Ltd and Neco Insurance Ltd posted gains of 4.8% and 4.42%.
On the other hand, Mountain Hydro Nepal Ltd suffered the most as the scrip’s price tanked almost 9% in the session. Salt Trading Corporation, which had been witnessing substantial price rallies in the earlier sessions, also came under pressure. The stock price dropped 6.09%. Pokhara Finance Ltd dropped 6.07%, while Rastriya Beema Company Ltd and Global IME Sammunat Scheme – 1 fell over 5% each.
As per the ARKS technical analysis, the market formed a small bearish spinning top candlestick suggesting indecision in the equity market following the past week’s advance. With long wicks on the either side of the candlestick, notable volatility was also evident on Sunday’s trading. Besides, the market also found some resistance at 1,800 point’s mark. Hence, the movement of the index in the current scenario must be closely monitored to gauge the probable direction of the equity market. Some correction or sideways movement can be expected. Else, a breakout above 1,800-point mark with notable volume can point towards further upward movement to fresh highs.
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)