KATHMANDU: The benchmark Nepal Stock Exchange (Nepse) index began the day on a positive note shooting up by almost 40 points in the morning, before giving up the gains quickly. Following the morning whipsaw, stocks registered a relatively poised trading in the afternoon as the index advanced steadily to close the day with a massive 73.78 gain at 1,423.09 points. The massive relief rally came on the back of investors looking to buy stocks at a comparatively discounted price with the overall equity market shedding around 20% in 6 straight days of panic selling. Many investors believe that the correction was abnormal and overstretched considering the overall economic and financial outlook, and hence took it as an opportunity to accumulate stocks at a bargain. Nonetheless, with turnover subdued compared to the prior week's activity, some caution still prevails in the equity market. The bourse saw a total turnover of over Rs 2 billion. Barring Mutual Fund segment, all other sectors closed the day with notable gains. Trading sub-index rallied the most closing over 8.3% higher. Similarly, Non-Life Insurance segment jumped 7.58%. Life Insurance and Hotels segments also posted gains of over 6% each. Heavyweight banking sector outperformed the major average with a gain of 5.78%. Other sectors followed suit.
Nepal Life Insurance Company continued to lead the list of actives. Over Rs 236 million worth of the life insurer's shares changed hands. NIC Asia Bank Ltd, NMB Bank Ltd and Himalayan Distillery Ltd were the other top turnover scrips with turnovers of Rs 146 million, Rs 122 million and Rs 118 million. Nabil Bank Ltd, Shivam Cements Ltd and Global IME Bank Ltd were among other actively traded equities. Four companies rallied exactly 10%. Salt Trading Corporation, Laxmi Laghubitta Bittiya Sanstha Ltd, Everest Insurance Company Ltd and Swabhimaan Laghubitta Bittiya Sanstha Ltd remained locked in to the upper band limit. Neco Insurance Company Ltd, Sabaiko Laghubitta Bittiya Sanstha Ltd and United Insurance Company Ltd were the other major advances which registered gains of over 9%.
On the other hand, recently listed shares of Himal Dolakha Hydropower Company Ltd suffered the most losing almost 10% on its price. Nepal Finance Ltd slumped 7.28%, while Khani Khola Hydropower Company Ltd lost 5%. Besides, mutual fund units were the other losing securities.
In terms of ARKS technical analysis, the index formed a strong bullish piercing line candlestick pattern which suggests bulls gaining control of the equity market. However, some caution should still be taken while going long unless another day of gain confirms a reversal from the short term downtrend. While Relative Strength Index (RSI) has reversed pointing upwards, Moving Average Convergence Divergence (MACD) still indicates slight downward momentum. However, the outlook is shifting favor of bulls with sellers losing steam. 1,350 points level can act as a major support towards the downside, while the index may face some resistance at 1,440 points mark.