NEPSE Declines Amid Policy Uncertainty and Bearish Technical Indicators

On Sunday, the first trading day of the week, the Nepal Stock Exchange (NEPSE) index declined by 8.57 points, closing at 2,679.98. This drop reflects investor caution in anticipation of two major policy events — the third quarterly review of the monetary policy by Nepal Rastra Bank and the upcoming full annual budget for fiscal year 2081/82. Political instability and policy uncertainty have intensified the "wait and watch" sentiment among investors.

Turnover Drops Sharply

Total market turnover stood at NPR 7.60 billion, a 22% decrease from Thursday’s NPR 9.82 billion. The cautious mood among investors is clearly reflected in both price movements and trading volume.

Sector Performance

Out of 13 sector indices under NEPSE, 11 declined, while only Microfinance and Trading saw gains.

• Microfinance was the top gainer, rising by 2.56%.

• Trading rose slightly.

• Sindhu Bikash Bank fell the most, declining by 8.28%.

• River Falls Power surged 7.56%, and Om Megashree Pharmaceuticals hit the positive circuit again, grabbing investor attention.

• Of the 248 traded stocks, 99 gained, 148 declined, and 1 remained unchanged.

Top Stock by Turnover

Radhi Hydropower led the turnover chart with NPR 714.9 million in trades, accounting for 9.4% of the total daily turnover.

Technical Analysis: Death Cross Approaching

From a technical standpoint, a bearish signal is emerging. The 50-day moving average (MA) is on the verge of crossing below the 200-day MA — a classic Death Cross formation, considered a strong bearish signal.

• As of Sunday:

  • NEPSE Index: 2,679.98

  • 50-day MA: ~2,668.28

  • 200-day MA: ~2,669.22

This convergence indicates growing downside pressure. The last major bullish crossover — the Golden Cross — occurred nearly a year ago and boosted market sentiment back then. Now, with the Death Cross looming, analysts see potential for long-term weakness unless macro signals improve.

Note: A Death Cross doesn't guarantee a correction but historically aligns with extended downtrends.

Broker Analysis: Mixed Sentiment in Buy/Sell

Among the top 10 active brokers:

• 5 brokers recorded more buy volume.

• 5 brokers leaned toward selling.

Broker 58 topped the chart with over NPR 1 billion in total trades:

• Buy: NPR 489.4 million

• Sell: NPR 514.1 million

• Buy/Sell Ratio: 0.952

Broker 42:

• Buy: NPR 359.8 million

• Sell: NPR 323 million

Broker 45:

• Buy: NPR 319.8 million

• Sell: NPR 300.3 million

Broker 34:

• Buy: NPR 222.6 million

• Sell: NPR 267.8 million

Brokers 49 and 35 also showed strong buying trends.

The NEPSE index sits at a critical junction — squeezed between a technical bearish crossover and upcoming policy decisions. Investor psychology, macroeconomic anticipation, and technical resistance are all converging.

Until the monetary policy review and budget announcement are out, the market is likely to remain volatile and cautious.
Now is the time for strategic analysis and disciplined investing.
Short-term traders should exercise caution, while long-term investors may need to re-evaluate their strategies.

“Watch the policy. Watch the chart. Don’t rush.”