The Nepal Stock Exchange (NEPSE) index retreated marginally at the end of the first trading week of 2020 as investors shunned banking and life insurance stocks that weigh high on the index, brokers said.

“Buying activity was primarily seen in manufacturing and microfinance stocks as investors focused on value-buying of stocks,” a broker said. “There was profit-booking in banking stocks which resulted in a lower market turnover, overall.”

The market index closed on Thursday at 1,166.21, fractionally lower than 1,167.41 the previous week. The total turnover on Thursday fell to Rs532,211.211 from Rs588,677,887 seen the previous Thursday. The total traded shares stood at 1,660,406 compared to 1,641,211 a week earlier. There were 7,000 transactions in all and as many as 170 company stocks were traded. At the end of trading last week, the total market capitalisation stood at Rs1,486, 519.37 million.

Shivam Cements Ltd was the star of last week's trading in terms of both value and volume.

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 formalized recently.

On Thursday, the banking sub-index fell 0.21 percent to 1,036.01, while the trading sub-index fell 0.58 percent to 682.77. Life Insurance sub-index fell too, by 0.83 percent. However, the manufacturing sub-index rose as much as 1.74 percent, while microfinance rose 0.94 percent and hydropower, by 0.24 percent.

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