NEPSE Welcomes New Year with a Strong Start, Gains 27 Points and Breaks Middle Band

The Nepal Stock Exchange (NEPSE) kicked off the new year (2082 BS) on a positive note as the first trading day on Tuesday showed significant gains. The NEPSE index surged by 27.14 points, closing at 2,689.22. After a prolonged period of volatility, the market successfully broke above the middle band (20-day Moving Average). Analysts noted that a close above 2,700 would have been even more bullish. The focus now shifts to the 50-day Moving Average (50MA), which could be a key level in the coming days.

Turnover Soars, Barahi Hydropower Sees Over NPR 2 Billion in Trading
Tuesday’s trading volume reached NPR 8.54 billion, with 21.8 million shares of 320 companies traded in 69,364 transactions. Barahi Hydropower led with over NPR 2.01 billion in trades, though its share price dropped 9.69% to NPR 230.46. NRN Infrastructure (NPR 420 million) and Radhi Bidyut (NPR 360 million) followed in trading volume.

Positive Circuit Breakers and Share Price Gains
Five companies hit the positive circuit breaker: Corporate Development Bank, Green Development Bank, Saptakoshi Development Bank, Nepal Micro Insurance, and Crest Micro Life Insurance, benefiting investors. Gurans Laghubitta’s share price rose 5.5%, while Super Madi Hydropower gained over 6%.

Sectoral Performance
Out of 13 sub-indices, 11 closed in the green. The Investment sub-index led with a 2.71% gain, followed by Development Banks at 2.5%. Hydropower, Finance, Hotels & Tourism, Manufacturing, and Non-Life Insurance sub-indices rose over 1%. Trading and Mutual Fund sub-indices saw minor declines.

Technical Analysis
The NEPSE chart shows a strong breakout above the 20MA, supported by a significant increase in volume—a bullish signal. The MACD indicator also reflects positive momentum. If the index secures strong support above the 50MA, it could continue its upward trajectory.

Market Concerns and Speculation
The sale of promoter shares by a strong business group like Jagadamba has sparked discussions. Investors are questioning why such a robust group needed to sell shares immediately, raising concerns about potential financial distress. Despite this uncertainty, the market’s green start has boosted overall sentiment.

Future Outlook
Low interest rates, ample liquidity in banks, and positive economic indicators are supporting the market. Investors are now awaiting third-quarter financial results and the appointment of a new governor at Nepal Rastra Bank. Strong earnings and market-friendly policies could propel NEPSE to new highs.