Nepse gains 50 points after losing 85 points in past two days
KATHMANDU, April 20: Nepal Stock Exchange (Nepse) rebounded by 3.1 percent, or 49.98 points, on Wednesday after logging heavy losses in the past two days.
The benchmark index shed a total of 85 points in last two trading days before bouncing back on Wednesday to close at 1,662.02 points.
Many analysts say that the stock market volatility was mainly fuelled by uncertainty over the local level elections scheduled for next month. “Investors have been reacting to whatever development occurs in the political front ahead of the election,” Anjan Raj Poudyal, former president of Stock Brokers Association of Nepal (SBAN), told Republica. “While positive developments related to the election lifts confidence of investors, negative reports unnerve them. So it is the election factor that is driving the course of the stock market,” he added.
The stock market was on a bearish trend after the BFIs tightened their funds and gave margin calls to investors that have borrowed from banks finance their share purchase in the wake of crunch of lendable funds. Ultra-low interest rate due to excess liquidity in the banking system about a year ago was one of the major drivers of the stock market boom. However, the benchmark index that reached a record high in mid-July last year started to retreat after BFIs started increasing rates since the start of this year.
As BFIs are still struggling to find lendable fund despite rise in interest rates, they are yet to see their deposit base expand significantly.
Insurance group led the gaining side as its sub-index rose 292.67 points to close at 8,654.36 points on Wednesday. The sub-index of Hotels group also climbed up 87.29 points to close at 2,184.93 points. Development Bank sub-index also ended 69.57 points higher at 1,947.4 points. Hydropower group also logged the gain of 68.61 points to close at 1,992.64 points. Banking, the heavyweight group, went up 49.2 points to finish at 1,542.21 points. The sub-indices of Finance, and Manufacturing and Processing groups also went up 17.71 points and 9.43 points, respectively, to close at 768.56 points and 2,166.91 points. 'Others' sub-index, however, fell by 1.16 points to close at 673.59 points.
A total of 1.8 million units of shares of 142 companies worth Rs 1.07 billion were traded in the market on Wednesday through 7,435 transactions.