KATHMANDU, Feb 8: The Nepal Stock Exchange (Nepse) index opened Monday’s session firmly higher but saw some retracement in the morning. Another advance followed suit with the index reaching as high as 2,560 points around mid-day. Stocks saw another correction in the afternoon. However, a final hour surge saw the index finish with a gain of 37.48 points slightly off its intraday high at 2,561.48.
The equity market continued to see notable charm with banks leading the surge on Monday. After rallies seen in microfinance and insurance segments in the past sessions, investors took significant buying position in BFIs on Monday. Subsequently, heavyweight banks helped the index notch its fresh high. Turnover improved further on the day. Over Rs. 10.62 billion worth of equities changed hands.
Banking stocks were the day’s winners. The group’s sub-index rose 3.65%. Its counterpart, Development Bank sector, also jumped 3.47%. Finance sub-index added 2.01%. Hotels, Life Insurance, Mutual Fund and ‘Others’ segments saw moderate gains. On the other hand, Manufacturing & Processing, Hydropower and Non-Life Insurance sectors fell around 1% apiece. Microfinance and Trading sectors corrected marginally.
Shares of Prabhu Bank Ltd were heavily traded on the day. Over Rs. 62 billion worth of the bank’s shares changed hands. Nepal Life Insurance Company Ltd, Nabil Bank Ltd and Deprosc Laghubitta Bittiya Sanstha Ltd posted turnovers of RS. 337 million, Rs. 334 million and Rs. 331 million. Global IME Bank Ltd, First Microfinance Laghubitta Bittiya Sanstha Ltd and Nepal Reinsurance Company Ltd were among other actively traded stocks.
Grameen Bikas Laghubitta Bittiya Sanstha Ltd remained locked in the upper circuit of positive 10%. Commercial Banks followed suit. Prabhu Bank Ltd, Sunrise Bank Ltd and Machhapuchhre Bank Ltd posted gains of 9.17%, 8.45% and 8.39%. Chhyangdi Hydropower Ltd and Garima Bikas Bank Ltd closed over 7% higher. Suryodaya Laghubitta Bittiya Sanstha Ltd, Nepal Finance Ltd and Manjushree Finance Ltd were among other major gainers.
In contrast, Himal Urja Bikas Company Ltd and Unnati Sahakarya Laghubitta Bittiya Sanstha Ltd fell over 6% each. Microfinance stocks followed suit. Swabhimaan Laghubitta Bittiya Sanstha Ltd, Civil Laghubitta Bittiya Sanstha Ltd and Laxmi Laghubitta Bittiya Sanstha Ltd posted losses of around 5% each. Similarly, other microfinance stocks also corrected on the day.
In terms of ARKS technical analysis, the market formed a bullish hammer candlestick on the daily timeframe. With the index marking fresh high, the sentiment remains firmly positive in the current juncture. Relative Strength Index (RSI), which gauges the momentum of the market, has hovered above 50 mark for more than 3 months. This reflects strength in the market and possibility of extension of the uptrend. 2,500 mark can act as a crucial support in case of a correction.
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)