Excess liquidity in the banking system, low interest rate and good performance results of listed companies for the quarter boosted confidence of the investors in the Nepali stock market. The market index touched nearly six months high on February 1, 2015 with 991.44 which was new high after the 985.45 of August 24, 2014. 

 

However, the disturbances in Constituent Assembly and polarization among political parties have pushed the market in wait-and-watch situation. Total turnover for the period was dragged significantly down by 55.44 per cent for the review period. 

 

Investors went on profit booking as stocks become pricy. Market capitalization for the period rose by 0.79 per cent despite the fall in the turnover. The stability phase of Nepse has been also supported by the presence of mutual funds and insurance companies. Earlier, insurance board had increased the permissible investment limit of insurance companies in banking and hydropower stocks to 15 from 10 percent of their insurance funds. The insurance companies seem to be utilizing this permission by increasing their investment in the stock market.

 

 

Development bank sector gained 69.79 points or 9.24 per cent to close at 825.44. Finance sector added 27.49 points or 5.32 per cent to reach 544.4. Trading sector surged by 4.39 per cent while manufacturing sector went up by 3.85 per cent. Insurance sector accelerated 76.82 points or by 1.83 per cent to close at 4279.18. However, hydropower sector lost 122.06 points or 5.17 per cent to rest at 2239.39. Hotel sector receded 2.51 per cent and the others sector lost 1.85 per cent while commercial banking sector descended 0.61 points or 0.07 per cent to close at 858.66.

 

Nepal Stock Exchange has classified 130 companies as ‘A’ class companies for this fiscal year. Last year 120 companies were categorized under this grade. Sensitive index that reflects the performance of these A category companies was positive during the review period by 0.69 points or 0.33 per cent to rest at 208.76 while the float index moved higher by 0.51 points or 0.75 per cent to 68.63.

 

Depending upon the sectorial distribution, total volume of trade was dominated by commercial bank and development bank groups. Commercial bank acquired 63.19 per cent and development bank 14.11 per cent of total trade. The insurance sector occupied 12.63 per cent and hydropower sector 5.83 per cent of trade while remaining portions were made up by other sectors. 

 

Technically, simple moving average (SMA) has been outcast by Nepse index. However, the test of index near 975 is important as 30 days SMA is also inclining up to reach this level. As suggested by the pivotal analysis, Nepse will hover around 987.04 to 1003.14 in case of higher range while moving around 979.74 to 963.64 in case of downfall.