KATHMANDU, Nov 29: Nepal Stock Exchange (Nepse) index rallied on Monday, gaining 40.68 points in the highly volatile market.
The market, which saw circuit-breaker clamped twice due to steep decline in the benchmark index, however, rebounded sharply in the latter half of the trading session before closing at 1,510.16 points.
Stock market analysts, however, said it was unusual for the stocks, which were in free fall in the initial trading hours, to make such a strong recovery in the latter half of the trading session.
The benchmark Nepse index had already shed 64 points by 1 pm. But it took a reverse course and recovered nearly 106 points by the time the market closed.
The first circuit breaker was clamped at 11:39 am, suspending trading for 15 minutes, after the market fell by 3 percent. Similarly, the second circuit breaker was enforced at 12:12 pm when marked dived by 4 percent to halt trading for half an hour. When trading resumed, share prices started climbing upward, leaving many investors confused and surprised.
Many believe that a rumor spread by a handful of investors that the Minister for Finance Krishna Bahadur Mahara was positive about increasing margin lending of bank and financial institutions also fuelled the market rise.
Nepse had plunged by 53 points on Sunday -- the first trading day of the week. The steep decline in the market on Sunday had led the Nepse to soothe investors and urge them to maintain caution while making investment.
Stock Brokers say that the selling pressure in the market slowed down at the end of the trading day. "Even those investors, who had given the selling order, were cancelling the orders. The buyers were prevailing in the market today which also fuelled the rise in stock prices," Anjan Raj Poudyal, former president of Stock Brokers Association of Nepal (SBAN), said.
All trading groups, except Manufacturing and Processing group, ended in the green zone on Monday. Insurance group led the gaining side with its sub-index climbing 134.9 points to close at 7,065.01 points. Hotels group also rose 75.74 points to close at 1,955.21 points. Banking, the heavyweight trading group in the secondary market, logged gains of 50.79 points to close at 1,440.34 points. Development Bank, Hydropower, Finance and Others groups also observed gains, despite volatility in the market.
A total of 1.4 million units of shares of 124 companies worth Rs 1.1 billion were traded in the market through 6,713 transactions on Monday.
Nepse up 10 points despite market volatility
