In the week earlier, the index had closed at 1,632.17.

“The market sentiment remains upbeat. The drop in the index is a correction from where the market would take off in the coming days,” said a broker.

As matters stand, investors are lapping up stocks they view as a long-term value proposition amid what is an improvement in the market liquidity.

In 2018 and 2019, the market had been bearish, but it bottomed out when the index touched 1,100. Since the fundamentals were good at that level, the buying interest of the investors got revived and a rally started at the beginning of 2020.

Market participants say their next target level for the index is 1,700.

The NEPSE index hit an all-time high of 1,888 on July 27, 2016.

Brokers say there is going to be a phase of market consolidation before a sustained rally can push the index past 1,700. Investor sentiment strengthened after the index breached the critical 1,300 level during the third week of the current year.

The focus of investors since the beginning of 2020 appears to have shifted to stocks that can be held over the long-term and can generate good dividends.

NEPSE’s total turnover on Thursday was Rs2,457,093,463 compared to Rs4,460,536,251 the previous Thursday.

The total number of shares traded on the market, on Thursday, stood at 5,940,533. There were 22,531 transactions in all and as many as 179 company stocks got traded. The total market capitalisation at the end of last Thursday’s trading stood at Rs1,832,855.60 million.

On Thursday, Nepal Life Insurance Company Limited’s stock was most traded in terms of both value as well as volume.

The market sentiments this year have been buoyed by the biggest merger in Nepal’s banking sector between Global IME and Janata Bank.

Traders previously cited a lack of liquidity as their biggest concern and the primary reason for the domestic stock market’s underperformance.