NEPSE Crosses 2700: Fifth Consecutive Gain Confirms Bullish Momentum, Technicals Strengthen Further

NEPSE & Market Overview
After hovering around the 2600 level for a prolonged period, the NEPSE index finally breached the psychological threshold of 2700, marking its first close above this level in nearly two months. The last time NEPSE traded above 2700 was on Baisakh 7 (mid-April). Following a five-day rally that began on Sunday, the market has gained nearly 100 points, with the index reaching 2694 on Wednesday and closing at 2703.96 on Thursday with an additional gain of 9.14 points.

This recent uptrend signals that the correction phase may be ending, and investor confidence is slowly returning. The persistent surplus liquidity in the banking system and historically low interest rates have created a favorable environment for investment in the capital market. Moreover, clarity from Nepal Rastra Bank's monetary direction and optimism about the upcoming monetary policy have supported market stability.

As the stock market’s traditional "season" approaches, which typically begins in the second half of Ashar (June–July), investor participation is expected to rise. Still, many investors are awaiting the upcoming monetary policy and the Q4 financial reports from listed companies, which are expected to further determine the market's direction.

Turnover & Sector Highlights
Despite the index gaining ground, total turnover on Thursday slightly declined compared to the previous day—from NPR 9.74 billion to NPR 9.64 billion. This slight drop is viewed as a sign of profit booking by investors after recent gains.

Out of 13 sub-indices, 8 closed in the green while 5 ended in red. The finance sub-index led the gainers with a 4.09% rise. Life insurance and non-life insurance followed with gains of 2.28% and 2.17%, respectively. Development banks and mutual funds also rose more than 1%. On the other hand, the trade sub-index fell by 1.29%, making it the biggest loser of the day.

Nepal Finance Limited hit the positive circuit limit, reflecting high investor demand. Khanikhola Hydropower and Samriddhi Finance both rose by over 7%. Conversely, Saptakoshi Development Bank plunged by 10%, making it the day's worst-performing stock.

In terms of turnover, Butwal Power Company topped the chart with trades worth NPR 316.8 million, followed by Sahas Urja (NPR 270M+) and Saptakoshi Development Bank (NPR 260M+).

Technical Analysis

The recent 5-day uptrend has pushed NEPSE past crucial technical levels. The chart reveals a strong structural shift, with the index forming Higher Lows (HL) and Higher Highs (HH) — a classic bullish pattern suggesting a confirmed trend reversal.

NEPSE has successfully maintained its position above the 200-day Moving Average (MA), indicating the end of a long-term bearish trend. The index is now approaching a key resistance zone near 2720, a level that has previously triggered sell-offs. If NEPSE breaks this resistance, the next targets are set around 2780 to 2800.

Also notable is the sector rotation underway: investor focus is shifting from the once-dominant hydropower sector toward insurance, development banks, microfinance, and investment companies — suggesting broader market stability and participation.

Broker Analysis

Among the top 10 brokers by turnover, 6 brokers showed higher buy volumes compared to sell volumes, indicating net accumulation. The remaining 4 brokers recorded more selling activity.

• Broker No. 58 led all brokers with over NPR 1.05 billion in turnover (Buy: NPR 509.4M | Sell: NPR 544.8M), including NPR 360M in matching trades.

• Broker No. 34 (Buy: NPR 360M | Sell: NPR 570M)

• Broker No. 49 (Buy: NPR 410M | Sell: NPR 330M)

• Broker No. 42 (Buy: NPR 370M | Sell: NPR 320M)

Looking at major trades, Broker No. 49 was responsible for 43% of the total buy volume in Krishi Bikas Bank — purchasing around 52,000 shares on behalf of investors.

With the index breaking past the 2700 mark, maintaining position above the 200-day MA, and forming strong bullish patterns on the chart, NEPSE has entered a phase of technical strength. Sector rotation, liquidity, and investor optimism ahead of the upcoming monetary policy and Q4 earnings season are all pointing toward continued market momentum. However, as always, prudent and informed decision-making is advised.