The market was on a correction mode this week following massive rise over the past two weeks to set new record. The benchmark index all time high of 1,222.43 points on Monday -- the second trading day of the week, before making some minor corrections on subsequent trading days. Hopes among investors that the Tarai turmoil and Indian blockade, which has hit the country for the past five months, will come to an end propelled Nepse index to a record high, according to stock brokers.
The bullish market was taking a dive in the run up to promulgation of constitution that triggered Tarai unrest and Indian blockade in September, according to stock analysts. However, the market rebounded to the previous level and eventually to a record high amid hopes that Tarai crisis will come to an end soon. The much-awaited full-fledged implementation of paperless trading system, or central depository system, toward modernization of the stock market has also fuelled Nepse index's gain, stock analysts say.
"It's natural for investors to book profit after the market reaches to a peak," Anjan Raj Poudyal, former president of Stock Brokers Association of Nepal (SBAN), said. "Profit booking mentality has gripped investors also due to the end of second quarter as most of the bank and financial institutions have already held their AGMs and endorsed dividend distribution proposal," he said, adding, "It seems that investors prefer to sell stocks right after reaping dividend rather than wait for another year to get returns."
Insurance group lead the losing side this week with its sub-index plunging 40.85 points to close at 5,409.16 points. Hydropower sub-index ended 15.95 points lower to settle at 2,141.52 points. Hotels and 'Others' groups also shed 6.76 points and 5.87 points, respectively, to settle at 1,772.4 points and 798.88 points. Banking, the heavyweight group, also went down 4.76 points to close at 1,106.57 points. Manufacturing and Processing group, however, went up 51.27 points to close at 1,842.02 points. Development Bank group also said its sub-index go up by 7.04 points to close at 1,210.25 points. Similarly, Finance group inched up 0.2 points to close at 585.78 points. Trading sub-index remained unchanged at 201.38 points.
A total of 6.17 million units of shares of 120 companies worth Rs 2.19 billion were traded in the market this week. The turnover is 12.68 percent higher than total transactions recorded last week.
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