However, market enthusiasm remained tepid. Total turnover for the day reached Rs. 2.66 billion, which was slightly lower than the pre-Tihar closing session on October 20 that recorded Rs. 2.79 billion.
The market experienced notable intraday volatility, dropping to 2,470 points around 11:23 AM before buyers stepped in during the afternoon session to push prices higher. A total of 55,960,077 shares were traded across 248 listed companies. Of these, 98 companies advanced, 146 declined, and 4 remained unchanged. This mixed breadth suggests investors remain cautious and unconvinced about a sustained rally.
Sector-Wise Performance:
Among the 13 sub-indices, only four sectors managed gains on the day. The 'Others' sector emerged as the strongest performer, rising 3.05%, with Nepal Reinsurance Company leading the charge with a 7.10% jump. Life Insurance, Non-Life Insurance, and Trading sectors also posted modest gains.
Conversely, the heavyweight Banking sector declined 0.35%, putting pressure on the overall index. Finance dropped 0.72%, Hydropower fell 0.33%, Development Banks shed 0.29%, and Investment companies lost 0.34%. The weakness in these traditionally dominant sectors particularly Finance and Banking is concerning, as these sectors typically anchor market movements.
Top Gainers and Losers:
Samata Domestic Microfinance led the gainers with an 8.89% jump, followed by Himalayan Power Partner (7.63%), Nepal Reinsurance (7.10%), and Women's Microfinance (6.05%). Notably, Siddhartha Bank 10.75% Debenture 2082 surged 10%, reflecting renewed interest in higher-yielding fixed-income securities.
On the losing end, Taragaun Regency Hotel suffered the steepest fall with a 7.16% decline, followed by Bhagwati Hydropower (7.13%), Asian Hydropower (5.16%), and Unnati Sahakarya Microfinance (4.72%). The weakness in hydropower stocks is particularly noteworthy given the sector's importance to Nepal's investment portfolio.
Technical Analysis (Analyst Perspective)
From a technical standpoint, according to market analysts, Sunday's candle represents a weak bullish pattern. The intraday plunge to 2,470 points tested a critical support zone, but buying interest managed to reverse the decline. However, the key concern remains low trading volume at just Rs. 2.66 billion, it signals a lack of conviction among buyers.Technical Levels (Analyst-Identified):
● Support Zone: 2,440–2,480 points
● Resistance Zone: 2,570–2,600 points
● Volume Trend: Weak – the low turnover indicates institutional players remain sidelined
Technical analysts note that without strong volume confirmation, any near-term rebound could prove short-lived. If the index sustains above 2,480 points, a move toward 2,570 becomes feasible, but a break below 2,440 could trigger further weakness.
Market Drivers and Sentiment
Positive Factors: The Nepal Rastra Bank's recent decision to reduce the risk weight on share loans from 125% to 100% is expected to improve liquidity in the capital market. Additionally, remittance inflows remain robustrecent months have seen over Rs. 176 billion monthly inflows, providing tailwinds for consumer spending and retail participation. Inflation remains subdued at 2.72%, and foreign exchange reserves are sufficient to cover 16 months of imports.
Negative Factors: The sluggish trading volume suggests investors are still hesitant to commit capital at current levels. Weakness in Banking and Hydropowertwo historically significant sectorsraises concerns about broad-based strength. Recent labor unrest at NEPSE premises and broader political uncertainty have also dampened market sentiment.
Conclusion and Outlook
While NEPSE closed in positive territory on its first day back after Tihar, the market's underlying momentum remains questionable. The combination of low volume, mixed sector performance, and intraday volatility suggests investors are wrestling with competing signals. The market is perched near technical support levels (2,440–2,480), and the next few sessions will be crucial in determining whether a genuine recovery takes hold or whether consolidation continues.
A sustainable rally would require renewed participation from institutional investors and improvement in traditionally strong sectors like Banking and Finance. Without this, the market risks drifting toward tested support zones.
Investor Takeaway: Conservative traders should await confirmation above the 2,570-point resistance level before initiating new long positions. Long-term investors might consider accumulating near major support zones, but should remain vigilant for potential volatility in the near term.
Resources Used :
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1. https://english.nepalnews.com/s/business/nepse-index-gains-5-19-points-on-first-trading-day-after-tihar/
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12. https://nepsetrading.com/blog/remittance-inflows-cross-rs-1700-billion-a-lifeline-for-nepal
13. https://www.sharesansar.com/newsdetail/first-2-month-macroeconomic-highlights-inflation-at-187-remittance-surges-331-foreign-currency-enough-to-cover-16-months-import-2025-10-14
14. https://kathmandupost.com/money/2025/10/13/nepse-gains-44-points-as-all-sub-indices-advance
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