NEPSE Hits a Half-Century, Market Indicates a Bullish Trend, Five-Month High Trading Volume
Author
Dipesh Ghimire
Nepal’s stock market index, NEPSE, surged by 69.80 points, reaching 2,727.58 points, marking a 2.62% increase. In recent months, the market has been moving sideways and correcting within the 2,400–2,700 range. However, today's strong rise has injected fresh energy into the market. The index has broken through the 2,700 psychological level, indicating renewed momentum.
Today's total trading volume reached around 13 billion NPR, the highest in the past five months. Nine stocks hit their circuit levels, and all 13 sub-indices ended in the green, reflecting a strong positive sentiment in the market.
Microfinance Sector Leads the Rally
The microfinance sector saw the highest growth, surging nearly 5%. The sector's technical charts appear strong, suggesting that investor interest may remain high in the coming days.
Market Growth Driven by Multiple Factors
Analysts believe today's market surge is influenced by various psychological and fundamental factors:
Upcoming Second Stock Exchange:
Nepal’s second stock exchange is in its final preparation phase. If it becomes operational, it could enhance trading infrastructure, increase competition, and boost investor confidence, contributing to today’s surge.
Declining Bank Interest Rates:
With lower interest rates, institutional investors are moving towards the stock market, increasing liquidity and driving up demand.
Change in Central Bank Leadership:
As Nepal Rastra Bank Governor Maha Prasad Adhikari’s tenure nears its end, investors anticipate policy changes that could be more stock market-friendly.
Government Economic Policies:
The government has introduced a new ordinance for economic reforms, reinforcing market confidence.
Technical Rebound & Market Psychology:
The NEPSE index had been in a sideways trend for six months, fluctuating between 3,000 and 2,400 points. The recent breakout near 2,780 suggests a potential rally towards 3,000+ levels if resistance is broken.
Strong Bullish Signals in the Market
NEPSE had been forming lower highs, but recently started forming higher lows, indicating a potential trend reversal.
A breakout with high trading volume signals increased participation from big investors.
If NEPSE crosses 2,780, it could rally towards 2,898 and 3,023 points, according to technical analysts.
If the market fails to break 2,780, a correction might occur, but the bullish structure remains intact.
NEPSE Trading AI's Heatmap
Our NEPSE Trading AI heatmap highlights that microfinance stocks dominated today’s rally, reinforcing the bullish market outlook.
User-Generated Technical Charts
Roshan Bahadur analyzed the Production & Processing sector, presenting a bullish chart.
Prasanna marked 2,730 as the first resistance level for NEPSE.
Rajan predicted that Standard Chartered Bank could soon hit 900 NPR.
Broker Activities
Six major brokers were net buyers today, while four brokers sold more than they bought.
Broker No. 58 had the highest turnover, selling NPR 7.852 billion and buying NPR 7.721 billion.
Broker No. 34 was the biggest buyer, purchasing NPR 5.695 billion and selling NPR 3.8 billion.
Broker No. 45 bought NPR 4.743 billion and sold NPR 4.796 billion.
Stock-Specific Broker Activity
Rasuwagadhi Hydropower: Broker No. 58 bought 42% of total trades, while Broker No. 62 sold 46%.
Laxmi Sunrise Bank: Broker No. 57 bought 51%, while Broker No. 67 sold 46%.
Sindhu Development Bank: Broker No. 72 bought 31%.
Green Development Bank: Broker No. 72 bought 61%.
Key Market Outlook
The focus is now on 2,780 points.
If NEPSE crosses 2,780, the market could enter a strong bullish phase.
If resistance holds, a correction might occur, but the bullish structure remains valid.
