Kathmandu. According to Nepal Rastra Bank, 55 trillion 47 billion deposits were accumulated in banks and financial institutions. On the same day, the loan-to-deposit ratio of banks and financial institutions fell to close to 84 percent. This means that more than 3 trillion 22 billion investable funds have been accumulated with banks and financial institutions.

Due to increasing liquidity in banks and low demand for loans, most of the big share investors had already seen that the loan interest rate will decrease further from June. Therefore, after showing the income tax system proposed in the budget, the market was reduced for a few days, and the rush to buy shares at cheap prices started. This is the reason why a significant improvement was seen in the stock market last week.

Increasing liquidity in banks and decreasing interest rates have raised hopes that not only the stock market will improve, but also the overall economic activity. Due to this enthusiasm, the stock market was seen on a continuous upward journey this week. This is the reason why Rastra Bank Governor Maha Prasad Adhikari has indicated that the loose monetary policy will not come yet. Despite that, the attraction of investors in the stock market has increased rapidly.

The gradual improvement in economic activity is sure to affect the stock market. Most of the investors believe that these positive signs will not allow NEPSE to fall below 1800 points. With this belief, investors are now picking up shares of the lowest point.

Last week's opening increase and the high trading pressure seen after more than four months, it seems that the condition of the stock market is getting stronger. However, it cannot be determined that this increase will fully arrest the bullish trend. According to NEPSE's chart analysis, if the index goes above 2370 points, the market will go on a full upswing. There is still a possibility that the stock market may undergo a broad 'correction' before proceeding on the path of long-term growth.

In the stock market, which has increased on all five days, the daily average of more than 3.67 billion has been traded. Along with the increase in NEPSE, the size of the stock market, i.e. the market capitalization, has also increased by around 1 trillion 52 billion to more than 29 trillion 86 billion compared to last week. The market, which had fallen below 1850 on 17th June, has risen by almost 200 points continuously.

However, this growth is not likely to continue for long. After the market rises to a certain level, investors start securing profits. This will cause the market to fall again and once again the players of the same shares will increase their purchases and the market will rise.