KATHMANDU: A huge rally on Sunday saw the benchmark Nepal Stock Exchange (Nepse) index notch a massive advance of 42.61 points to settle at 1,255.72 points. Following a 17 point rise in the morning, the index flattened in the mid-session. Further, stocks saw considerable buying pressure in the latter trading hours pushing the index up to a fresh 5-month high.
After the index managed to hold on to its December and January gains, investors continued to take heavy long positions in almost all of the traded sectors with some comparing the current accent to last March-April's rally where the major average had crossed 1,300 points mark. Sentiment remains largely bullish with turnover also crossing Rs. 1 billion mark. More than Rs. 1,335 million worth of securities changed hands on the day.
All sectors closed in green contributing towards the broader index's surge. Non-Life Insurance segment led the day's charge with the group's sub-index shooting up by over 8 points. Subsequently, Life Insurance and Microfinance sectors surged over 6% apiece. Hotels and Hydropower segments registered gains of over 3% each. All other sectors closed the day firmly higher. Meanwhile, heavyweight bank's sub-index witnessed a gain of 2.52%.
Shares of Nepal Life Insurance Company Ltd saw the highest transaction in the day with a total turnover of over Rs. 58 million. Correspondingly, Grameen Bikas Laghubitta Bittiya Sanstha Ltd and NIC Asia Bank Ltd posted turnovers of Rs. 46 million and Rs 41 million, respectively. Shivam Cements Ltd, Deprosc Laghubitta Bittiya Sanstha Ltd and First Microfinance Development Bank Ltd were among other active scrips of the day.
Among best performers, 7 companies rallied exactly 10% on Sunday. The shares include Surya Life Insurance Company Ltd, Nepal Insurance Co Ltd, RMDC Laghubitta Bittiya Sanstha Ltd, Premier Insurance Co Ltd, Mero Microfinance Bittiya Sanstha Ltd, Siddhartha Insurance Ltd and Prabhu Insurance Ltd. Other microfinance and insurance stocks followed suit with over 9% gains apiece.
On the other hand, some of the energy stocks bucked the trend. Shares of both Mountain Hydro Nepal Ltd and Synergy Power Development Ltd gave up more than 2%. Likewise, shares of Bottlers Nepal (Terai) Ltd dipped 1.99%. Union Hydropower Ltd, Sindhu Bikash Bank Ltd and Prime Commercial Bank Ltd Promoter Share were among other losing scrips with declines of over 1% each.
On the corporate space, Salt Trading Corporation announced 25% stock dividend and 10% cash payout for fiscal year 2018/19. The trading company's scrip added 1.73% on the day.
ARKS technical analysis indicates the market forming a bullish marubozu candlestick reflecting massive buying pressure witnessed in the day. Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) which gauges the momentum and prevailing trend also suggest that the market is likely to continue in its course upwards. The bourse might face resistance at 1,180 points where some retracement can be expected. Nonetheless, the overall sentiment remains strongly bullish in the present context.
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)