NEPSE Corrects After 6-Day Rally; High Broker-Side Selling Seen, Profit Booking Dominates

After rising for six consecutive trading days, the NEPSE index saw a correction on Monday. According to the Nepal Stock Exchange (NEPSE), the index dropped by 22.35 points, closing at 2684.01, falling below the psychological support level of 2700. The recent rally had pushed the index up by 110.59 points over six days. Analysts attribute the correction to short-term investors booking profits after a sustained uptrend.

Trading Volume Declines; Suspected Matching in Key Stocks

The total trading volume stood at NPR 8.37 billion, lower than the NPR 9.5 billion recorded the previous day. A total of 71,313 transactions took place across 311 stocks, resulting in the exchange of 19.4 million shares.
The highest turnover was seen in Nepal Reinsurance Company (NRIC), with over NPR 807 million in trades.
Broker No. 55 alone recorded NPR 2 billion in turnover, buying NPR 1.16 billion worth and selling NPR 810 million. It accounted for 84% of total buy and 41% of total sell in NRIC, raising suspicion of possible matching trades.

Top Gainers and Losers

The biggest gainer was Mailung Khola Hydropower, which rose 6.56%, followed by Corporate Development Bank (up over 6%) and Bhagawati Hydropower (up 4%).
The steepest decline was seen in Rapti Hydro and General Construction, which fell by 10%.

Sector Performance: Only 2 in Green

Out of 13 sectoral sub-indices:

• Only two (Hotel & Tourism and Mutual Funds) closed in green.

• The Finance sector declined the most, falling 3.76%.

• Hydropower, Manufacturing & Processing, and Trading sectors each dropped by over 1%.

Technical Analysis: Breakdown from Doji Support

NEPSE broke below the low of the previous session’s Doji candle, a key support zone.

• This confirms increasing seller dominance and signals a bearish trend.

• The index is now expected to test the 200-day moving average (around 2674).

• RSI currently stands at 58.26, which is below overbought levels but indicates potential downside.

• Decreasing daily turnover suggests weakening buying interest, especially in the hydropower sector, which is facing sustained supply pressure.

Broker Behavior: Sellers in Control

Among the top 10 brokers:

• 8 brokers sold more than they bought.

• Broker 55 dominated buying, particularly in NRIC and GMLI:

  • Bought 516,000 NRIC shares, sold 254,000.

  • Bought 169,000 GMLI shares.

• Broker 58: NPR 390M buy vs NPR 430M sell.

• Broker 34: NPR 300M buy vs NPR 410M sell.

After a strong start to the week, the market has paused for correction as investors lock in short-term profits. With adequate market liquidity and anticipation building around the upcoming monetary policy announcement, a rebound is possible in the near term. However, technical patterns and broker activities suggest that selling pressure may continue in the short term, especially with credit limit adjustments ahead of fiscal year-end settlements.