Nepal Stock Exchange (Nepse) index gained 54.65 points, or 3.5 percent, on Wednesday, as investors went on a buying spree pushing up prices of almost every share that was traded.

The index, which opened at 1553.68 points on Monday, glided down to intra-day low of 1559.85 points, but made a quick recovery to end the day at 10-day high of 1,608.33 points. 

This gain added Rs109.2 billion to the value of shares listed on the stock market, pushing up market capitalisation to Rs1,789.5 billion.

“Today’s hike indicates chances of bearish trend hitting the market again are low,” Stockbroker Anjan Poudel told the Post.

The panic selling of Sunday, which led the index to shed 4.2 percent, and dampened investor sentiment seen in the first half of Monday had caused panic among investors. At that time, most of the retail investors had dumped shares, while big investors had stopped placing buying orders, anticipating further drop in stock prices. This trend was seen by many as harbinger of harsh days for investors.

But the recovery made in the second half of Monday and rally that continued on Tuesday and Wednesday, according to Poudel, have revived investor sentiment.

“Investors are looking at short-term trends to make buying and selling decisions rather than analysing the fundamentals of listed companies,” Deepesh Vaidya, managing director of Kriti Capital and Investments, told the Post. “So, they seem to overreact whenever the index fluctuates.”

On Wednesday, all sub-indices ended the day in green, except for hotels sector, which remained stable at 1959.59 points. The biggest gainer during the day was Nepal Insurance Company, which added 10 percent to its stock value to close at Rs968. Shares of Miteri Development Bank and Womi Microfinance Bittiya Sanstha also ended 10 percent higher at Rs550 and Rs1595, respectively. 

Other big gainers were state-owned Rastriya Beema Company and Laxmi Laghubitta Bittiya Sanstha, whose share prices jumped 9.99 percent each to Rs11,779 and Rs1,178, respectively.

On Wednesday, shares of 135 companies worth Rs1.4 billion were traded on the bourse, of which 12 firms ended the day in the red zone. “The trend of last two days shows there is still demand for shares,” said Poudel. “But share prices might undergo correction after mid-January, as that is the period when all listed companies must hold annual general meetings.”

The stock market generally remains stagnant right before and after completion of annual general meetings because listed companies formally announce dividends at that time. “But that is also the period when companies start publishing their second quarter financial results,” said Poudel. “If the results are impressive, share prices will definitely go up.”