NEPSE Weekly Review: Index Dips 1.32% Amidst Bearish Sentiment, Rs. 21.45 Billion Turnover Recorded

The Nepal Stock Exchange (NEPSE) concluded the trading week on a somber note, with the benchmark index registering a 1.32% decline, settling at 2,650.09 points. This marks a continuation of the downward trend observed in the previous week, where the index had already shed 1.79%. The market's performance this week underscored a prevailing bearish sentiment among investors, with only a handful of sectors managing to close in positive territory.

Throughout the week, the NEPSE index experienced significant volatility, reaching an intraday high of 2,705.46 and dipping to a low of 2,641.93, resulting in a 63.53-point fluctuation. This level of volatility, while lower than the previous week's 91.66 points, still indicates a period of uncertainty and price discovery. The highest single-day loss occurred on Tuesday, with the index dropping 21.15 points, accompanied by a turnover of Rs 4.07 billion. Cumulatively, the total turnover for the week stood at an impressive Rs 21.45 billion, reflecting active trading despite the overall market decline. Over 53.3 million unit shares were traded across 284,499 transactions, bringing NEPSE's current market capitalization to Rs 45.54 trillion.

From a technical analysis perspective, several indicators point towards continued bearish pressure. The Relative Strength Index (RSI) readings on both daily and weekly timeframes were below the neutral 50-mark, at 43.96 and 44.85 respectively, suggesting a lack of strong buying momentum. Furthermore, the Moving Average Convergence Divergence (MACD) indicator reinforced this outlook, with a reading of -1.60, positioned below the zero line, and its signal line also in the negative zone. This configuration typically signals a bearish crossover and sustained downward momentum. The NEPSE Index's position below both its 20-day and 5-day Exponential Moving Averages further confirms the short-term bearish trend, indicating that the market is trading below its recent average prices. Investors should closely monitor the 2,600 level, which is identified as the nearest significant support, while the 2,780 zone is expected to act as a major resistance level, potentially capping any immediate upward movements.

Sectoral performance mirrored the broader market's weakness, with only two out of the thirteen sub-indices managing to post gains. This widespread decline suggests that the selling pressure was not confined to specific sectors but was rather a market-wide phenomenon. High beta stocks, which are typically more volatile than the overall market, were led by Ridge Line Energy Limited (RLEL) with a beta of 4.571, followed by Shreenagar Agritech Industries Limited (SAIL) at 4.178, and Shikhar Power Development Limited (SIPD) at 3.991. These stocks are prone to larger price swings in response to market movements, offering both higher risk and potential reward.

Among individual stocks, Everest Colour Limited (ECL) emerged as the top gainer, closing at Rs 1,665.00 with a remarkable increase of 27.17% (Rs 355.70). This significant surge highlights pockets of strong individual performance even in a declining market. Conversely, the 10.25% Kumari Bank Debenture 2086 (KBLD86) experienced the steepest decline, with its price falling by 22.16% to an LTP of Rs 1,080.00, indicating a notable loss of investor confidence in this particular debt instrument.

In terms of trading activity, Ridi Power Company Limited (RIDI) dominated the turnover charts, with shares worth Rs 1.39 billion changing hands, making it the most actively traded company by value. This high volume suggests strong investor interest and liquidity in RIDI shares. Interestingly, Naasa Securities Co. Ltd. (Broker No.- 58) stood out as both the top buying and selling broker of the week, purchasing stocks worth Rs 2.33 billion and selling stocks worth Rs 2.31 billion. This dual role indicates Naasa Securities' significant market presence and active participation in facilitating trades across various scrips.

Looking ahead, the NEPSE market appears to be in a consolidation phase with a clear bearish bias. Investors should exercise caution, paying close attention to the 2,600 support level. A breach of this level could signal further downside, while a sustained rebound from it might indicate a potential reversal. The overall economic outlook and upcoming corporate earnings reports will also play a crucial role in shaping market sentiment in the coming weeks.