NEPSE Ends the Week Slightly Positive, But Market Foundation Remains Weak

Kathmandu — The Nepal Stock Exchange (NEPSE) closed slightly in the green on the final trading day of the week. The index rose by 1.13 points, settling at 2,545 points. Despite the mild uptick, the market remained volatile throughout the session. Around 12:31 p.m., NEPSE dipped to 2,530 points, facing selling pressure, before rebounding to 2,559 points at 2:06 p.m.—the intraday high. However, the market failed to sustain this momentum by the end of the day.

Limited Gains, Weak Market Breadth

Only a few selective stocks contributed to the rise. Six companies — Mabilung Energy, Swetganga Hydropower, Sagar Distillery, Bungal Hydropower, Bandipur Cable Car, and Ruru Hydropower Project — hit the upper circuit (10% gain) today. While these stocks generated momentary excitement, the overall market foundation remained fragile.

Out of all listed companies, 123 advanced, 124 declined, and 8 remained unchanged, reflecting a weak market breadth. The total trading turnover also dropped from NPR 3.84 billion to NPR 3.49 billion, signaling lower investor participation and waning confidence.

Sectoral Performance: Mixed Sentiment

Sectoral indices displayed a mixed pattern.
The Banking, Finance, Hotel & Tourism, Hydropower, and Trading sectors gained 0.12%, 0.09%, 0.72%, 0.22%, and 0.79% respectively.
Meanwhile, Non-Life Insurance, Manufacturing & Processing, Life Insurance, Investment, and Development Banks sectors declined between 0.07% and 0.46%.
This uneven performance underlines the prevailing lack of conviction and market uncertainty.

Top Gainers and Losers

Among the top gainers, Daramkhola Hydropower surged 6.88%, Bhugol Energy gained 4.99%, and Dolti Power rose 4.20%.
On the other hand, Nepal Micro Insurance dropped 4.82%, followed by Eastern Hydropower (-3.70%), Best Finance (-3.18%), and Super Madi Hydropower (-2.50%).
This sharp divergence among stocks reflects high volatility and sector-specific movement in the market.

Most Active Stocks

The most actively traded companies were Himalayan Power Partners, Himalayan Distillery, Union Hydropower, NRN Infrastructure, and Sahas Urja.
Although these stocks attracted trading volume, they were not sufficient to drive the entire market upward.

Macroeconomic and Policy Factors

The removal of the NPR 250 million margin loan limit by Nepal Rastra Bank (NRB) had initially sparked optimism, even triggering a positive circuit on the first trading day after the policy announcement.
However, the momentum soon faded.
Analysts attribute this to political instability, weak investment climate, declining business confidence, and macroeconomic uncertainty, which continue to weigh on investor sentiment.

Despite NRB’s reform measures, such as liquidity management and credit flexibility, the capital market has not yet regained stable momentum.

Investor Sentiment and Market Psychology

NEPSE has been under continuous downward pressure for several sessions.
While short-term volatility is a natural feature of the stock market, the persistent downward trend has eroded investor morale.

Following the change in government after the GenZ movement, investors had high hopes for pro-market policies. However, the lack of concrete initiatives has instead led to confusion, fear, and uncertainty in the capital market.

Technical Outlook

From a technical perspective, NEPSE continues to struggle near its middle Bollinger Band.
Recent candles have shown repeated rejections around the 2,540 level, suggesting that while this zone acts as short-term support, the bearish pressure remains strong.

If the index breaks below 2,540, analysts anticipate the next support level around 2,470–2,480 points.
Among the top ten brokers, six were net buyers while four were net sellers, indicating a partially balanced yet cautious sentiment in the trading community.