KATHMANDU, Sept 22: The local equity market saw strength since the beginning of Wednesday’s trading hour. The Nepal Stock Exchange (Nepse) index rallied more than 60 points in the morning before pulling back slightly. Stocks continued to surge in the latter trading hours with all sectors ending firmly in green. At the close, Nepse registered a gain of 104.88 to settle at 2,816.95.
After a highly volatile session on Tuesday, investors showed renewed enthusiasm helping the market stage a 100-point rebound. However, the index is yet to see a major recovery, while still trading around 400 points lower than its all-time high. Turnover dropped slightly with just over Rs. 6 billion worth of equities changing hands.
Finance and Development bank segments were the leaders with the respective indices jumping 8.54% and 7.75%. Hydropower sector climbed 5.57%. All other sectors witnessed notable strength and closed firmly in green.
Among actives, Arun Valley Hydropower Development Company Ltd posted a turnover of Rs. 233 million followed by National Hydropower Company Ltd which saw a transaction of Rs. 185 million. RMDC Laghubitta Bittiya Sanstha Ltd, Himalayan Distillery Ltd and Api Power Company Ltd were the other heavily traded shares of the session.
Premier Insurance Company Ltd, Best Finance Company Ltd, Guheshwori Merchant Bank & Finance Co. Ltd and ICFC Finance Ltd were among the major gainers with each scrip hitting the upper circuit level of 10%. Besides, several other hydropower, finance and development stocks rose 10% on the day.
Amidst the broad rally, no stocks ended in negative territory.
As per the ARKS technical analysis, the index formed a strong bullish candlestick marking a morning star candlestick pattern which usually suggests a reversal. However, key 2,800 mark must be watched before taking any significant position on the buying side. A breakout above 2,800 with volume in the coming sessions can see the index make a decent recovery towards 3,000. On the other hand, immediate support can be taken as 2,700 psychological line.
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)