NEPSE Crosses 2600, Major Investors Focused on Buying
Author
Dipesh Ghimire
Sunday marked a positive day for the Nepali stock market as the NEPSE index rose by 12.58 points, reaching 2601.21 points. With over 6.25 billion NPR in trading volume, investors displayed increased enthusiasm. Out of 13 sectors, 10 sectors closed in green.
The highest trading volume was recorded by NRN Infrastructure and Development, with trades worth 260.85 million NPR. It was followed by Super Madi Hydropower and Sanima Middle Tamor Hydropower in second and third positions, respectively. A total of 129 million shares of 325 companies were traded.
The ongoing disclosure of second-quarter financial reports of commercial banks has made investors more active in predicting the market's future.
Key factors supporting the market include declining interest rates and the ample liquidity in the banking system. Reports show that the demand for margin loans has increased by 20%, driving up demand for stocks.
Previously, NEPSE had dipped below the psychological level of 2500 points but regained its position above 2600 on Sunday. Analysts believe the market is striving for recovery, especially after its earlier drop from a high of 2780 points to 2400 points. Many experts had forecasted signs of recovery with the start of the Nepali month of Magh.
Investors are advised to focus on companies with strong dividend potential to mitigate risks. However, concerns remain about the potential decline in bank profits, prompting some investors to adopt a 'wait-and-see' approach.
Technical Analysis
According to NEPSE Trading’s technical team, the current support level is 2550 points, while the resistance level stands at 2647 points.
If the index closes above 2647, it is recommended to buy, signaling a potential rally. Conversely, a close below 2550 may suggest selling pressure.
The Dragonfly Doji candlestick pattern formed in the banking sector is seen as a positive indicator, with analysts suggesting a possible reversal.
Broker Analysis
A review of trading activities among the top 10 brokers shows that 8 brokers predominantly engaged in buying, while 2 brokers leaned towards selling.
Broker No. 58 conducted the highest volume, with 364.9 million NPR in buy trades and 329.2 million NPR in sell trades.
Broker No. 65 recorded 342.9 million NPR in buy trades and 244.9 million NPR in sell trades.
Broker No. 49, however, sold more, with 206.2 million NPR in sell trades compared to 145 million NPR in buys.
In stock-wise trading:
Super Madi Hydropower saw Broker No. 65 accounting for 93% of purchases, buying 191,000 shares while also selling 62% of its shares.
Nepal Bank saw Broker No. 33 buying 51% of total trades.
Sanima Bank had Broker No. 44 purchasing 44% of total trades.
Despite the positive signals, financial reports will play a crucial role in determining the market's future trajectory. Positive results could lead to new highs, while negative reports might dampen investor confidence.
