After two consecutive days of gains, the NEPSE index dropped by 13.69 points on Wednesday, closing at 2,664.47. Despite the decline, strong momentum in hydropower stocks provided technical support to the market.

Currently, mid-cap and fundamentally strong companies are driving the market. Previously, low-cap stocks were dominant, but analysts now anticipate large-cap stocks will gain traction.

Positive market drivers:

Optimistic outlook from the central bank governor
New stock exchange licensing process
Ample liquidity in the banking system
Declining interest rates

However, the market has yet to respond as strongly as expected. Still, analysts see early signs of recovery. Wednesday’s total turnover was NPR 9.90 billion, slightly lower than Tuesday’s NPR 10.16 billion.

Top performing stocks:

Butwal Power, Pure Energy, Synergy Power hit positive circuit levels
River Falls Power surged by nearly 8%
Saptakoshi Development Bank had the highest loss, down 4.83%

Highest turnover:

Radhi Power Company – NPR 615.7 million
Sanima Mai Hydropower – NPR 590 million
Butwal Power Company – NPR 585 million

Out of 13 sub-indices, 11 declined. However, Hydropower Sub-Index rose by over 1%. Mutual Funds remained stable, while Finance, Hotels & Tourism, Others, and Trading sub-indices fell by more than 1%.

Technical Analysis:

The index found support at the 50-day moving average. The RSI also indicated that the market is not in the oversold zone. A possible “Twitter Top” pattern is forming, which often signals a reversal, but analysts say it’s not yet confirmed. As long as the market doesn’t close below 2,600, the pattern is not validated.

Among the top 10 brokers, 4 had more buy transactions than sell, while 6 had more sell orders. Overall, the buy-sell ratio remained nearly balanced.

Despite the decline, hydropower stocks are showing strength and giving technical support. Analysts see early recovery signs, especially with key economic factors favoring the market’s medium-term outlook.