The Nepal Stock Exchange (NEPSE) index gained traction last week due to positive buying sentiment among investors who cherry-picked on the potential value stocks available at basement-level prices even though there was no direct catalyst, brokers said.

“The bargain-hunting by investors, particularly in insurance stocks, led to an increased turnover on the market. It seems the market is consolidating ahead of a short-term rally," a broker said.

The market index closed on Thursday at 1,167.41, higher than 1,149.64 the previous week. The total turnover on Thursday rose to Rs588,677,887 from Rs419,088,133 the previous Thursday. The total traded shares stood at 1,641,211 from 1,289,134, a week earlier. There were 6,000 transactions in all and as many as 172 scrips were traded. At the end of trading last week, the total market capitalisation stood at Rs1,482,941.85 million.

Nepal Bank was the star of last week's trading with more than Rs33 million worth of its shares being traded.

The market sentiments in recent weeks have been led by the biggest merger in Nepal’s banking sector between Global IME and Janata Bank, which got formalised recently.

On Thursday, the banking sub-index rose 0.07 percent to 1,043.66, while the trading sub-index rose 6.26 percent. Life Insurance sub-index rose too, by 0.29 percent and Development Bank by 0.14 percent. However, the manufacturing sub-index fell as much as 1.03 percent and hydropower too got dragged lower by 0.69 percent.

Market participants cite lack of liquidity as their biggest concern and the key reason for the stock market’s underperformance.