KATHMANDU: Nepal Stock Exchange (Nepse) index rallied on Thursday – the last trading day of the week, recouping all the losses of the past two weeks. The benchmark index closed at 1242.41 points, posting a gain of 36.01 points compared to Wednesday.

Investors seemed hopeful that the upcoming monetary policy will address, among others, margin-lending issue which has triggered the recent sell-off in the secondary market. Hence, the expectation that the margin lending cap will be relaxed can be seen as a ground for the rally seen on the day. Consequently, the market succeeded to lure otherwise passive investors into the secondary market as the market activity increased by a massive 87 percent. A turnover of Rs 467 million was recorded in the bourse on Thursday.

All major sub-indices, except Manufacturing & Processing and Trading, followed the broader market. Significant strength was seen in Insurance and Microfinance stocks as their sub-indices gained 5 percent each. Likewise, sub-indices of Hydropower and Hotels groups finished 3 percent higher each. Banking Sub-index also logged a gain of 2.66 percent.

National Life Insurance Company Ltd was the most active stock on the day as Thursday was the last trading day of shares of the life insurer ahead of its 60 percent rights issue. Shares worth Rs 37 million of the company changed hands on the day. Further, shares of Chhimek Laghubitta Bikas Bank Ltd and Prime Commercial Bank Ltd posted turnover of Rs 22 million and 21 million, respectively.

In terms of top gaining stocks, United Insurance Company Ltd turned in the best performance for the day, gaining 10 percent to hit the upper circuit. Additionally, Mithila Laghubitta Bittiya Sanstha Ltd and United Modi Hydropower Ltd also saw its share price rally over 9 percent each. Laxmi Laghubitta Bittiya Sanstha Ltd, Everest Insurance Company Ltd and Gurans Life Insurance Company Ltd also gained over 8 percent each.

Rairang Hydropower Development Company Ltd continued its losing streak, shedding over 7 percent on the day. Besides, share price of World Merchant Banking and Finance Ltd and Unilever Nepal Ltd dropped by over 5 percent and 3 percent, respectively. 

In news front, the cabinet meeting held on Wednesday has decided to dismiss all political appointments done by the previous government. This means Chandra Singh Saud, who was appointed the CEO of Nepse by the former government, could lose his post.

As per the ARKS technical analysis model, the market experienced a significant bullish force with the formation of a bullish marubozu candlestick on the daily timeframe. With the day’s gain, momentum indicators like Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) have now shifted away from the negative territory. Further, the market can be expected to enter upward movement on a sustainable basis if the index manages to hold above the 1,200-point mark with considerable volume in the coming sessions.

 
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