Stock Market Halts Downtrend: NEPSE Index Rises by 26 Points, Big Money and Operators Suspected to Enter

After six consecutive trading days of decline, the Nepal Stock Exchange (NEPSE) showed a double-digit recovery on the second trading day of the week, Monday. The NEPSE index rose by 26.01 points to settle at 2,640.78. On the previous trading day, Sunday, the index had dropped by 54.62 points to close at 2,614.68. On Monday, the market initially dipped to 2,592.32 but steadily climbed to close at 2,640.78 by the end of the session.

While the index showed improvement, the trading volume decreased. On Monday, the total turnover amounted to NPR 4.48 billion, significantly lower than Sunday’s NPR 6.26 billion. This suggests a slight reduction in investor activity, but the rise in the index reflects a positive sentiment in the market. Among the companies traded, 210 saw their share prices increase, while 33 experienced a decline. Guardian Micro Life Insurance posted the highest gain of the day at 9.29%, while Upper Hewakhola Hydropower saw the steepest drop at 4.29%.

All sectoral indices recorded gains on Monday. The banking group rose by 0.92%, development banks by 0.78%, finance by 3.75%, hotels and tourism by 1.16%, hydropower by 1.00%, and investment by 0.95%. Similarly, life insurance increased by 1.64%, manufacturing by 0.80%, microfinance by 0.90%, non-life insurance by 0.61%, and trading by 1.55%. In contrast, on Sunday, all sectors had declined, with banking dropping by 1.47%, development banks by 2.42%, finance by 2.99%, hotels and tourism by 2.23%, hydropower by 2.33%, and investment by 2.05%. Life insurance, manufacturing, microfinance, and non-life insurance had also fallen by 1.85%, 1.46%, 2.36%, and 2.07%, respectively.

Last week, the NEPSE index shrank by 67 points over five trading days, following an 82-point decline the week before. The 14-day downward streak had sparked fear among investors. After a sharp correction (from an intra-day high of 2,900 to the 2,500 range), Monday’s recovery signals a potential halt to the downtrend. Analysts suggest that the bull run may be slowing but predict a gradual recovery ahead. Low interest rates, ample liquidity in banks, and strong financials of companies are providing support to the market. Speculation is rife that big money and market operators have begun entering, countering the panic selling by small investors.

An analysis of broker activity shows that among the top 10 brokers with the highest turnover, eight recorded relatively higher buying volumes, while two leaned toward selling. Broker No. 58, which led the day’s turnover, recorded transactions worth NPR 355 million. The dominance of buyers among brokers indicates a shift toward purchasing at lower prices.

From a technical perspective, most NEPSE indicators remain negative. However, technical analysts argue that it is not yet time to sell, advising investors to wait for a “lower high.” Despite the significant decline, they maintain that this is part of a broader bull market cycle. Even with Monday’s rise, technical indicators largely remain in negative territory.

On the same day, a meeting at Singha Durbar between Prime Minister KP Sharma Oli, Nepali Congress President Sher Bahadur Deuba, and CPN (Maoist Centre) Chairman Pushpa Kamal Dahal ‘Prachanda’ addressed resistance to royalist activities and discussions on the Truth and Reconciliation Commission (TRC). Analysts note that this meeting’s message of political stability has positively influenced the stock market.

Himalayan Reinsurance led the turnover with NPR 326.9 million, followed by CEDB Holdings and Nepal Reinsurance in second and third places, respectively.

After a prolonged decline, the NEPSE index rose by 26.10 points to 2,640.78 on Monday, with a turnover exceeding NPR 4.48 billion. The uptick across all sectoral indices, the entry of big investors, and a stable political signal have bolstered the market. Analysts expect a gradual recovery as the market stabilizes moving forward.