KATHMANDU, Oct 21: Stocks traded in green throughout Wednesday’s trading session. The benchmark Nepal Stock Exchange (Nepse) index rose more than 11 points in the morning but gave up most of its gains by mid-day. Nonetheless, stocks saw another rally in the latter trading hours with the index closing at its intraday high of 1,597.72 points. The day’s advance stood at 13.94 points.

The day’s advance marks the bourse’s third straight day of gain where the index climbed more than 40 points in total. Hence, the market has garnered more enthusiasm ahead of the holidays with investors buying stocks in the recent correction. Daily market participation is also gradually improving. Over Rs 1.63 billion worth of shares were traded on Wednesday as compared to Tuesday’s total transactions of Rs 1.27 billion.

Sectors maintained positive bias with most closing in green. Heavyweight Banks saw notable charm as the group’s sub-index jumped 1.71%. Trading sector also went up 2.19%. Mutual Fund and Non-Life Insurance sector also saw strength and closed around 1% higher. Sub-indices of Life Insurance, Development Bank, ‘Others’ and Microfinance also closed in positive territory. On the other hand, Hydropower sector fell 1%, while Hotels fell 0.85% on average. Manufacturing & Processing and Finance segments inched marginally lower.

NIC Asia Bank Ltd’s shares were heavily traded on the day after the commercial bank announced 20% dividend for the fiscal year 2019/20. While 19% will be distributed as stock dividend, the remaining 1% will be endorsed in cash for tax purpose. Kumari Bank Ltd and Nepal Bank Ltd saw turnovers of Rs 84 million and Rs 74 million respectively. Himal Dolakha Hydropower Company Ltd and Global IME Bank Ltd registered  turnovers of Rs 66 million and Rs 45 million respectively.

General Insurance Company Nepal Ltd stretched its rally to sixth session in a row as its share price shot up by another 10%. Nepal Hydro Developers Ltd and Shangrila Development Bank Ltd surged 4.49% and 4.40%. NIC Asia Bank Ltd rallied 4.13% on dividend announcement. Kumari Bank Ltd, Salt Trading Corporation and Goodwill Finance Co. Ltd were among other top gaining scrips.

On the other hand, Nepal Finance Ltd saw the biggest percentage loss of the day. Its share price tanked 5.05%. Khani Khola Hydropower Co. Ltd and Ankhu Khola Jalvidhyut Company Ltd followed suit as both tumbled 4.72%. Panchakanya Mai Hydropower Ltd, National Hydropower Company Ltd and Chhyangdi Hydro Ltd suffered losses of over 4% each.

In terms of ARKS technical analysis, the index formed a bullish candlestick on the daily timeframe reflecting sustained momentum in the equity market after mid-October correction. The bourse has also extended its rebound with increasing volumes, which suggests notable buying interest ahead of the holidays. However, with the index now trending close to its resistance at 1,600, the market’s movement must be closely monitored. The breach of the 1,600 mark can see the market gather more legs to the upside. On the other hand, a rebound with volume can suggest possibility of further 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)

www.arkscapitaladvisors.com

 
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