Market Sentiment Rebounds: Nepal's Stock Market Valuation Crosses Rs 5 Trillion Mark

KATHMANDU – The Nepal Stock Exchange (NEPSE) has regained significant momentum, reflecting growing investor confidence fueled by hopes of political stability and the anticipation of capital market-friendly reforms from the new government. As of Tuesday, the total market capitalization has surpassed the Rs 5 trillion threshold, positioning the market to potentially challenge its previous all-time highs.According to data from the Nepal Stock Exchange, the total market capitalization reached Rs 5.002 trillion on Tuesday. This figure is closely approaching the historical record of Rs 5.009 trillion set last August. With the national GDP currently estimated at approximately Rs 6.2 trillion, the stock market’s valuation now accounts for nearly 80 percent of the total economic output—a ratio that financial analysts view as a positive indicator of the market's growing depth and its integration with the broader economy.The expansion of the market is not merely a result of price appreciation but is also heavily supported by the influx of new listings. Over the past two years, 24 new companies have entered the secondary market, adding over Rs 291 billion in market capitalization. The addition of substantial entities such as Reliance Spinning Mills, Solu Hydropower, Bandipur Cable Car, and SY Panel has significantly broadened the market's asset base and provided more diversity for investors.Technical indicators further suggest that the bullish trend is likely to persist. The NEPSE index has recorded gains for five consecutive trading sessions, closing at 2,960.40 points on Tuesday—a rise of 23.83 points. Market technicians point to the "inverted hammer" pattern on Tuesday’s candlestick chart as a sign of shifting momentum, indicating that buyers are asserting control while selling pressure is diminishing. While the index remains below its all-time high of 3,227 points, market observers believe that if the current volume and upward trajectory continue, a new historical record is within reach.Sector-wise, the trading group led the rally with a sharp 9.12 percent gain, supported by strong performances in the development bank, commercial banking, and hydropower sectors. However, the market saw mixed results elsewhere, with some profit-taking observed in the hotel, insurance, and microfinance sectors. While Tuesday’s turnover of Rs 14.83 billion represents a slight dip from previous sessions, the prevailing sentiment remains overwhelmingly optimistic. For now, all eyes are on the government’s upcoming fiscal and monetary policies, which investors hope will provide the necessary tailwinds to sustain this rally and push the market toward new heights.