The Nepal Stock Exchange (Nepse) ended the week marginally higher as gains in banking stocks helped keep the benchmark index in positive territory.

During the review period from June 29 to July 3, the benchmark Nepse index rose 3.89 points, or 0.15 percent, to close at 2,653.40 points, up from 2,649.51 points the previous week.

The Sensitive Index, which tracks Class “A” companies, gained 2.13 points, or 0.47 percent, to 459.81 points, while the Float Index edged up 0.64 points to 181.96 points.

Despite the modest rise in the benchmark, market capitalisation increased to Rs 4.55 trillion from Rs 4.53 trillion, adding around Rs 20 billion to investors’ wealth over the five trading days.

Trading activity, however, weakened. Weekly turnover fell 8.45 percent to Rs 18.32 billion from Rs 20.01 billion in the previous week. Average daily turnover declined to Rs 3.66 billion from Rs 4 billion, a drop of nearly Rs 338 million, reflecting a cautious investment climate.

Among sectoral indices, banking was the strongest performer, rising 19.49 points, or 1.38 percent, to 1,435.73 points. The Finance, Trading and Development Bank subindices also posted gains of 0.66 percent, 0.51 percent and 0.23 percent, respectively.

The Manufacturing and Processing subindex recorded the sharpest decline, falling 1.35 percent to 10,553.36 points. The Hotel and Tourism subindex also dropped 0.96 percent to 7,370.34 points.

Among individual stocks, Snow Rivers Limited more than doubled in value, surging 101.05 percent to Rs 690.60. Kalanga Hydro Limited and Sanigad Hydro Limited followed with gains of more than 32.2 percent each.

Asian Hydropower was the biggest loser of the week, declining 6.74 percent to Rs 437, while Bhagawati Hydropower fell 6.66 percent.

Laxmi Sunrise Bank led the market in both turnover and trading volume. Shares worth Rs 796.4 million changed hands during the week, with 3.695 million shares traded. The bank's stock rose 2.17 percent to close at Rs 221. Reliance Spinning Mills Limited recorded the second-highest turnover at Rs 649.2 million.

Market analyst Jagannath Dhungel said the market lacks a positive short-term outlook despite the continued accumulation of fundamentally strong, dividend-paying stocks.

He said large investors may be quietly reducing their exposure amid ongoing investigations into stock market-related incidents. The need for investors to arrange funds to pay interest on loans due in mid-July has also contributed to weaker market sentiment, he added.

Dhungel, however, remained optimistic about the medium-term outlook.

“The market may stabilise and move higher as the government's economic priorities become clearer and its policies begin to produce results,” he said.