NEPSE Rises, Market Technically at Support Level, Investors Awaiting Monetary Policy Review

The stock market, which had been declining for five consecutive days, showed signs of improvement today, Tuesday, the third trading day of the week. Nepal’s stock market index, NEPSE, increased today, reaching 2,683.86 points. The total turnover in the market today exceeded NPR 7.24 billion. A total of 299 companies participated in the trading, with more than 13.96 million shares being bought and sold. Based on the transaction amount, CEDB Holdings ranked first, followed by Nyadi Hydropower and United Modi Hydropower in second and third positions, respectively.

vToday, four companies hit the positive circuit level, and the indices of five sectors closed in the green. Notably, the development bank sector witnessed a significant influx of investors. With the market's increase today, the total market capitalization has reached NPR 4.455 trillion.

Currently, general investors are awaiting the second-quarter review of the monetary policy. Investors are hoping for policy relaxations to support the market's growth. However, the risk associated with margin lending remains high. At present, the individual investment limit remains at NPR 150 million. Banks and financial institutions have been demanding permission for short-term investments in the stock market. Currently, shares cannot be traded for a period of less than one year, and there is an ongoing demand to amend this regulation.

The central bank has already eased many policies, but since this will be Governor Maha Prasad Adhikari’s final monetary policy review, investors expect him to take a balanced approach to satisfy all stakeholders. According to high-level sources, further flexible policies may be introduced, which could positively impact the market.

The market had previously dropped below the 2,700 level and showed some sluggishness, but recent trading activities have been positive. General investors can benefit by analyzing the key financial indicators of companies and investing in fundamentally strong dividend-paying stocks. However, some analysts argue that a daily turnover of NPR 12–15 billion is necessary to ensure investment security. Many believe the market is currently in a bullish phase, albeit in a sideways bullish pattern. Traders find the current market favorable, and investors can consider mid-cap and high-cap fundamental stocks. It is reported that experienced investors who understand the market and have the ability to sell at the right time are actively purchasing shares. However, analysts suggest that less-informed investors, particularly those engaged in full-time jobs or other responsibilities, should focus on fundamentally strong companies.v

Technical Analysis

The market has established a strong support level around 2,650–2,660 points. If the index sustains above this level, it could soon reach its first target of 2,785 points.
Currently, bullish signals such as golden cross and MACD crossover are visible, indicating that the market is gradually moving in a positive direction. However, the market faces some resistance around the 2,700 level, as many investors tend to book profits at this point.
If the index fails to break through this resistance, it may decline again towards the support range of 2,560–2,480 points.
Today's trading volume exceeded NPR 7.24 billion, reflecting strong investor activity. Although the market appears stable overall, technical analysts recommend that investors make cautious decisions.

Broker Analysis

An analysis of share transactions by the top 10 brokers reveals that Broker 58 had the highest trading volume. This broker purchased shares worth approximately NPR 3.553 billion and sold shares worth NPR 3.16 billion, with a total transaction amounting to NPR 6.713 billion. The buy/sell ratio of this broker was 1.124, indicating strong buying momentum.

Similarly, Broker 34 recorded the highest buy/sell ratio at 1.236, actively participating in purchases, while Broker 28 showed a buy/sell ratio of 1.249, demonstrating an even stronger buying trend. Conversely, Broker 48 had the lowest buy/sell ratio of 0.861, indicating dominance in selling activity.

Based on total trading volume, Broker 45 and Broker 34 ranked second and third with transactions worth NPR 5.238 billion and NPR 4.701 billion, respectively. This trading pattern suggests that while some brokers are accumulating shares for long-term investments, others are booking short-term profits, which will directly influence future market volatility.

In today's stock market, analyzing broker purchase and sales activities reveals that Broker 88 accounted for 37.93% of total purchases and 37.81% of total sales in Nyadi Hydropower, indicating matched transactions.

Similarly, in LSL, Broker 64 purchased 66.54% of total traded shares, while Broker 48 led in sales, accounting for 48.76%.

In HIDCLP, Broker 28 accounted for 75.05% of total purchases.

Meanwhile, in HEIP, Broker 16 purchased 64.66% of the total shares, whereas Broker 72 was responsible for 92.35% of the total sales, indicating heavy selling pressure.