KATHMANDU, June 2: The Nepal Stock Exchange (Nepse) index opened Wednesday’s session in green before correcting towards the opening level in the morning. Nonetheless, stocks continued to see strength after mid-day. A steady advance throughout the afternoon trading pushed the index 55.76 points to finish session at 2,827.13. 

While heavy profit taking dragged the index more than 56 points lower from the all-time high of 2,827 mark, investors taking long positions after major price corrections helped the stock market recoup almost all of its recent losses. Consequently, Nepse rests just shy of its Sunday’s all-time high. Market participation also improved in the final trading hours. As a result, the market saw a turnover of Rs. 11.35 billion compared to Rs. 8.59 billion in the session earlier. 

Barring mutual fund segments, all sectors ended the day higher. Finance and Development Bank sectors were the major winners with gains of 7.91% and 6.13%. ‘Others’ sector also jumped firmly with the sub-index closing 5.24% higher. Non-Life Insurance sub-index rallied 3.34%, followed by Hydropower, Hotels & Tourism and Manufacturing & Processing segments, which rose over 2% apiece. All other sectors ended the day in positive territory. 

Nepal Reinsurance Company Ltd was the most actively traded stock on Wednesday as over Rs. 1.38 billion worth of the reinsurer’s shares changed hands. Nirdhan Utthan Laghubitta Bittiya Sanstha Ltd and Sanima Mai Hydropower Ltd saw transactions of Rs. 334 million and Rs. 322 million. Lumbini Bikas Bank Ltd, Jyoti Bikas Bank Ltd and Asian Life Insurance Company Ltd posted turnovers of Rs. 298 million, Rs. 230 million and Rs. 218 million.

Rastriya Beema Company Ltd and Sanima Mai Hydropower Ltd were the biggest percentage gainers of the day as both stocks rallied 10%. Finance stocks followed with Manjushree Finance Ltd, Pokhara Finance Ltd and Samriddhi Finance Ltd posting advances of 9.97% apiece. Lumbini Bikas Bank Ltd, Janaki Finance Ltd, Guheshwori Merchant Bank & Finance Co. Ltd, ICFC Finance Ltd and Shree Investment Finance Co. Ltd also jumped 10% each.

On the other hand, Radhi Bidyut Company Ltd plunged sharply as the energy scrip closed more than 7.23% lower. Bishal Bazar Company Ltd and Corporate Development Bank Ltd fell over 1% each. Ganapati Microfinance Bittiya Sanstha Ltd, Narayani Development Bank Ltd and Siddhartha Insurance Ltd also inched lower. 

As per the ARKS technical analysis, the index formed a bullish candlestick suggesting notable strength in the session. However, with the benchmark resting close to its resistance, its reaction at the current level will be crucial in gauging the possible direction of the market. Momentum indicators, meanwhile, suggests indecision amidst high volatility in the sessions of late. Failure to break the current resistance might see the index test immediate support at 2,750 mark.

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)

 
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