Nepal Stock Market: Slight Improvement Amid Uncertainty Over Governor Appointment

The Nepal Stock Exchange (NEPSE) witnessed a modest uptick on Wednesday. The NEPSE index rose by 7.01 points, closing at 2696.23. Similarly, the Sensitive Index gained 1.30 points, the Float Index increased by 0.70 points, and the Sensitive Float Index climbed 0.66 points. However, trading volume dipped from Tuesday’s NPR 8.5 billion to NPR 7.26 billion.

A total of 16.6 million shares from 329 companies were traded in 64,360 transactions. Five companies—Corporate Development Bank, Barahi Hydropower, Nepal Micro Insurance, Crest Micro Life Insurance, and Radhi Bidyut Company—hit positive circuit breakers. Ngadi Group Power’s share price surged by 7.5%, while Gurans Laghubitta’s share price fell 5.55%, making it the top loser.

Ngadi Group Power led in trading volume with NPR 594.1 million worth of shares traded, followed by Radhi Bidyut Company (over NPR 500 million) and Barahi Hydropower (approximately NPR 430 million). Among the 13 sub-indices, the hydropower sub-index rose the most by 1.63%, while the others sub-index declined by 1.07%.

Investors expressed optimism about the market moving upward from its current stable state. Low bank interest rates, ample liquidity in financial institutions, and balanced economic indicators have bolstered confidence. Analysts note that policy reforms and the absence of long-term risks signal a bright future for the market.

However, uncertainty surrounding the appointment of the Nepal Rastra Bank governor may slightly impact market sentiment. Additionally, investors are keenly awaiting the third-quarter financial reports of listed companies, which could influence short-term market dynamics. Despite this, the medium-term outlook remains positive.

Technical analysis indicates that NEPSE has encountered resistance at the 2710 level or the 50-day moving average zone. Experts suggest investors adopt a ‘wait-and-see’ approach until this level is breached. Political instability and the ongoing uncertainty over the governor’s appointment could affect the market in the near term.

The third-quarter financial reports of banks, expected to be released this week, are seen as a critical factor in determining the market’s short-term direction. Overall, analysts remain confident in the market’s positive medium-term trajectory.