Kathmandu, February 6:

After a steep fall for three consecutive days, stock market today recovered with a marginal gain of 2.09 per cent with the market capitalisation rose up by Rs 4.74 billion.

Nepal Stock Exchange (Nepse), the country’s sole secondary market, today closed higher at 723.54 points with a gain of 14.81 points against the Tuesday’s plummet of 43.05 points.

The stock market had wiped out Rs 14 billion on Tuesday trading, with share prices experiencing one of the steepest falls and Nepse had to suspend the trading. However, following caution from the market regulator, the trading improved and Nepse a saw market capitalisation- the value of the listed shares-rise to Rs 231.43 billion, up from Rs 226.69 billion.

Over the last couple of weeks, the Nepse has stayed at declining trajectory, shedding almost 300 points. Before this, the share prices had soared, despite strong warnings from concerned authorities that the rise was not justifiable. The market had even crossed 1000-point mark some six weeks ago.

Except the development banks, all groups recovered with a growth in the range of 0.71 per cent to 6.41 per cent. The development banks suffered a huge loss of 24 per cent, as the share price of Development Credit Bank Ltd (DCBL) plunged by a whopping Rs 2,150 per share to Rs 750 from earlier closing of Rs 2,900.

Nepse had to impose ‘circuit breaker’ three times today alone to temporarily halt the trading owing to sudden rise in index and at the end Nepse suspended the market transactions due to a sharp decline of share prices of DCBL. Today’s top gainers were Standard Chartered Bank Nepal, Nepal Investment Bank, Bank of Kathmandu and Everest Bank Ltd. SCBN earned Rs 420 per share, NIBL made Rs 134, BOK earned Rs 124 and EBL made Rs 118 per share. Apart from DCBL, today’s top losers were Swabalamwan Bikash Bank and Himalayan Bank Ltd. Swabalamwan lost Rs 305 per share, while HBL’s share price dropped to Rs 1,366 from the previous closing of Rs 1,394.

The market insiders say that announcement of Nepal Telecom’s equity sales, liquidity crunch in the market and rights share issuance by major companies could have led to current fall in the stock market.

“The stock market has become very volatile. There could be serious fallout if corrective measures are not taken on time,” says stock analyst Rabindra Bhattarai.

Meanwhile, Dr Chiranjibi Nepal, chairman of Securities Board of Nepal (SEBON) urged investors to sell stock only after assessing risk, corporate fundamental of listed company and availability of liquidity in the market. If the investors try to reach conclusion to sell shares on the basis of whim, it would put them at risk, he added.