NEPSE Index Turns Green: Gains in 12 Out of 13 Subgroups, Investor Confidence Returning

The NEPSE index showed a strong rebound on Sunday, the first trading day of the week, rising by 26.53 points to close at 2,622.28. This comes after three consecutive sessions of decline. Although the total turnover slightly decreased compared to Thursday—from NPR 7.78 billion to NPR 7.12 billion—the overall market sentiment appeared positive, with 12 out of 13 subgroups closing in the green.

The banking subgroup led the rally with a 2% gain, marking the highest increase among all categories. Development banks, microfinance, and others also posted over 1% growth. The only declining sector was manufacturing and processing.

On the individual stock front, Saptakoshi Development Bank hit the upper circuit level, Bindhyabasini Hydropower surged nearly 9%, and Machhapuchchhre Bank Debenture 2085 saw over 8% gain. On the downside, Joshi Hydropower declined by 5.57%, making it the biggest loser of the day.

In terms of trading volume, Sahas Urja Limited led the market with shares worth NPR 578.6 million traded. Butwal Power Company and Union Hydropower followed with trades worth over NPR 350 million and NPR 240 million respectively.

Technical Analysis: Breakout Signals Emerging, but Caution Remains

From a technical perspective, today’s bullish candle breaks the recent pattern of weak positive candles. The price closed above the high of Thursday’s inverted hammer candle, a classic signal of potential market reversal. However, despite the upward movement in prices, total turnover declined—showing some hesitancy in strong buying momentum.

The hydropower sector's trading volume dropped from 70% to 62% of the total market share, while banking, development banks, and microfinance sectors saw increased activity. Historically, banking rallies tend to be short-lived, but if the banking index manages to sustain this move, NEPSE could enter a strong upward trend.

A large bullish Marubozu candle also formed today, a pattern that often triggers overreaction in the market. The index dropped by 3 points during the last 15 minutes of trading, signaling short-term fragility. Still, if banking stocks avoid negative reactions tomorrow, a solid trend formation could be underway.

Broker Activity Analysis: Buying Pressure Visible

Out of the top 10 brokers by turnover today, 6 executed more buy trades than sell, while 4 focused more on selling. Broker number 58 led the day with NPR 640 million in total trades, out of which NPR 330 million were buys and NPR 300 million were sells. Similarly, Broker 42 recorded NPR 560 million in trades with NPR 345.5 million in buys and NPR 210 million in sells. Broker 34 had NPR 240 million in buys and NPR 270 million in sells.

These numbers reflect active accumulation, especially by a few dominant brokers—indicating new investor entries or insider confidence in selective counters.

Today’s NEPSE session sent a positive message to the market. Widespread gains across subgroups, bullish technical signals, and strong broker-side buying hint at a potential trend reversal. However, the decline in trading volume and a minor late-session dip suggests investors should remain cautious. Going forward, the performance of banking stocks will be a critical indicator of whether this recovery is sustainable or temporary.