The stock market continued to log gains as investors are on a buying frenzy, according to stock brokers. Recent political developments that ended the four-month Tarai unrest and Indian blockade have lifted investors' confidence, they added. Liquidity surplus in the banking system and falling interest rates are the other factors that have supported the growth in the secondary market, according to stock brokers.
"Low interest rates is encouraging investors to put their money into securities rather than stashing their money in banks which do not yield more than 3 percent interest rates. With the money flowing into the stock market, demand for the shares is going up," a stock broker told Republica. "Improvement in political climate has also boosted the confidence of investors," he added.
Many analysts also see the less-than-expected impact of recent turmoil on listed companies as the other factor behind impressive run of the benchmark index. "Most of the bank and financial institutions (BFIs), which dominate the secondary market, are posting impressive earnings despite recent problems. This has also helped to lift the market," said another stock broker.
Hotels group was the biggest gainer of the week as its sub-index climbed up 61.95 points to close at 1,760.84 points. Sub-indices of Manufacturing and Processing, and Insurance groups also jumped 28.6 points and 26.42 points, respectively, to end the week at 1,979.48 points and 5,562.21 points. Banking, the heavyweight group in the secondary market, also ended 19.12 points higher at 1,168.62 points. Development Bank and Finance groups also logged gains of 7.56 points and 6.71 points, respectively, to close at 1,257.55 points and 611.27 points. Hydropower and 'Others' group, however, suffered loss of 8.31 points and 3.52 points, respectively, to close at 2,263.99 points and 822.37 points. Trading group, however, remained unchanged at 201.38 points.
A total of 8.47 million units of shares of 136 companies worth Rs 2.54 billion were traded in the market this week through 12,531 transactions.
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