Nepal Stock Exchange Index and Trading Volume Decline Amid Investor Wait-and-See Approach

Kathmandu. As investors adopt a 'wait and see' strategy, both the index and trading volume in the Nepal Stock Exchange (NEPSE) have declined this week. The market, which closed at 2714.05 points in the previous week, ended the last trading day of this week at 2708.70 points, falling by 5.35 points, or 0.20 percent.

Throughout the week, the market remained between a high of 2719.62 and a low of 2659.86. While the index saw a marginal drop, the trading volume experienced a sharp decline. Trading volume was limited to approximately 45.04 billion rupees this week, a decrease of about 36 percent from the 70.36 billion rupees traded in the previous week. This indicates that there is no immediate significant buying or selling pressure in the market.

According to technical analysis, the Relative Strength Index (RSI) on NEPSE's daily chart stands at 57.05, and on the weekly chart, it is at 55.30. An RSI above 50 and around 60 signals that the presence of buyers is still maintained in the market. This suggests the market is in a balanced state, not overbought or oversold, with room for further upward movement.

Another important indicator, the MACD, remains above the zero line at 18.52, and the signal line is also in the positive zone. The MACD staying in the positive zone indicates that the medium-term trend of the market is still positive or 'bullish'.

However, the NEPSE index has fallen below the 5-day Exponential Moving Average (EMA). This indicator suggests that short-term profit-taking or minor corrections are occurring. But, since the index remains above the 20-day Moving Average, it signals that there is no need to panic. The market appears to have established 2650 points as the nearest support and 2830 points as the major resistance.

Sectorally, investors' interest was seen in the Hotel and Tourism sector this week. Among the 13 sub-indices, six showed gains, with the Hotel and Tourism group rising the most by 2.19 percent.

Non-Life Insurance and Manufacturing and Processing groups also saw improvements of more than 1 percent. On the other hand, the Finance group experienced the highest decline of 1.03 percent as investors sought to secure profits. The Banking and Microfinance groups also ended the week in negative territory.

In terms of company performance, this week was very pleasant for investors in Kalinchowk Darshan Limited. The company's share price increased by 34.36 percent to reach 1078.10 rupees. Conversely, Kalika Power Company's share price plummeted by 9.27 percent. In terms of trading volume, SY Panel Nepal Limited was the most popular this week, with the company alone recording transactions exceeding 2.65 billion rupees.

Observing broker activities, NISA Securities appears to dominate the market. NISA Securities became both the top buyer and seller of shares this week, executing purchases worth 3.33 billion rupees and sales worth 3.26 billion rupees.