KATHMANDU: The stock market saw considerable strength since the beginning of Sunday's trading. The benchmark Nepal Stock Exchange (Nepse) index went up by more than 20 points within 15 minutes of the beginning of trading. Following a brief correction, the index stretched its gaining spree in the latter trading hours and eventually ended the day with a massive gain of 33.43 points at 1,343.65 points.
The secondary market has shown no signs of losing steam, despite a surge of over 200 points in the past one and half months. Investors were enthused to take significant buying positions in almost all traded sectors. Market activity crossed Rs 2 billion-mark for the first time since February 2019 following heavy trading on the day. Investors remain considerably upbeat as Nepse continues to make fresh highs. However, some profit booking can be expected in the coming sessions which might result in slight retracement.
Except Trading sub-index, all sectors ended the session in green. Leading the gainers were Non-life Insurance and Life Insurance sub-indices which rallied over 6% each. Following closely, Finance and Mutual Fund segments closed over 5% higher. The sub-indices of Hydropower and Development Bank groups also rallied around 4% each. All other sectors closed the day firmly higher. Market heavyweight Banking segment also went up by 1.54%.
Among active stocks, shares of Himalayan Distillery Ltd and Shivam Cements Ltd registered turnovers of Rs 121 million and Rs 101 million, respectively. Nepal Life Insurance Company Ltd, meanwhile, posted a turnover of Rs 88 million. Commercial banks, subsequently, saw active trading with Prabhu Bank Ltd, Nepal Credit and Commerce Bank Ltd and NIC Asia Bank Ltd seeing Rs 81 million, Rs 66 million and Rs 63 million worth of shares traded, respectively.
Insurance sector dominated gainers' chart. Share prices of Prime Life Insurance Company Ltd, Siddhartha Insurance Ltd and Himalayan General Insurance Ltd hit the upper circuit of 10%. Laxmi Equity Fund and Janaki Finance Ltd also saw their unit prices go up by 10% each. Similarly, other insurance sector scrips saw considerable strength adding over 9% on the day.
Swabhimaan Laghubitta Bittiya Sanstha Ltd, on the other hand, suffered the most. The microfinance scrip, which had been rallying persistently, saw a 6.7% correction on the first trading day of the week. Kalika Power Company Ltd saw its unit price fall by 5.05%, while share price of Joshi Hydropower Development Company Ltd tanked 4.47%. Share prices of Bishal Bazar Company Ltd, and Shree Investment and Finance Co Ltd slumped by over 3% each. Rairang Hydropower Development Company Ltd, Panchakanya Mai Hydropower Ltd and Ghodighoda Laghubitta Bittiya Sanstha Ltd were among other top losing scrips of the day.
In corporate space, Manjushree Finance Ltd published its second quarter earnings results on the day reporting a substantial growth in net profit. Its profit after tax grew from Rs 19.68 million in the corresponding quarter of the previous fiscal year to Rs 143 million. However, the massive growth is attributed mainly to increased non-operating income and reduced impairment charge.
ARKS technical analysis indicates that the market formed a third straight bullish candlestick reflecting bulls in firm control at the current juncture. Buyers seem to be buying any dips preventing the benchmark index from posting any major decline. Technical indicators, supported by increased volumes, suggest that the market is likely to extend gains further with notable momentum.
However, investors should be cautious of a possible retracement, given the market rallied more than 80 points in three days.
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)