31st October 2025, Kathmandu
The Nepal Stock Exchange (NEPSE) benchmark index demonstrated a decisive return to bullish sentiment on Thursday, successfully crossing the significant 2,600-point psychological threshold.
NEPSE Crosses 2,600 Points
The index surged by a robust 34.22 points, ending the trading session at 2,600.38, signaling renewed market confidence and an accelerated momentum that followed several weeks of less dynamic movement. This strong upward trajectory was overwhelmingly powered by the Hydropower sector, which firmly cemented its position as the market’s leading growth engine.
A Surge in Trading Volume Confirms Investor Confidence
Thursday’s rally was not merely a change in price; it was underpinned by a substantial increase in market activity and liquidity. The total daily turnover experienced a significant jump, reaching NPR 7.51 billion, a considerable increase from the NPR 5.45 billion recorded the previous day. This expansion in transaction volume, alongside the rise in market capitalization, indicates a broadening and deepening of investor participation in the secondary market.
Broad-Based Gains: The positive sentiment was widespread, reflecting genuine enthusiasm across most segments. Out of 319 listed securities traded, a commanding 248 stocks recorded price gains, while only 59 declined. This overwhelming positive breadth demonstrates that buying interest is not confined to a few scrips but is flowing into numerous sectors, creating a stable foundation for the overall market advance.
Sectoral Strength: While all sectoral indices, save for mutual funds, closed in the green, the primary drivers of the day’s movement were the hydropower and microfinance groups, which continue to draw substantial investor capital due to their perceived long-term growth potential and stable corporate performance.
Hydropower: The Undisputed Market Leader
The Hydropower sub-index stood out as the undisputed best performer of the day, escalating by a remarkable 2.67 percent to close at 3,370 points. The exceptional performance of the energy sector is driven by a confluence of factors that have heightened its appeal to both short-term traders and long-term institutional investors:
Improved Operational Environment: Optimism is fueled by improving production capacities across the sector, favorable weather conditions ensuring optimal water flow, and the significant progress in cross-border energy export agreements, particularly with India. This potential for regional energy trade transforms hydropower companies from domestic suppliers into key players in the sub-continent’s energy economy.
Governmental Support and Completion of Projects: Consistent government policies that encourage clean energy development, coupled with several key hydropower projects nearing completion, have contributed to investor optimism regarding future corporate profitability and dividend potential. The market is increasingly valuing hydropower stocks based on their projected capacity expansion, leading to sustained demand and sector-specific rallies.
Microfinance and Institutional Activity: Key Market Highlights
Beyond the dominant hydropower rally, other sectors showed strong individual performance, and a massive institutional transaction provided a significant liquidity boost.
Upper Circuit Achievers: The financial inclusion sector saw two microfinance companies hit the day’s upper circuit limits of 10 percent. Gurans Laghubitta Bittiya Sanstha Limited closed at NPR 2,310 per share, while Unnati Sahakarya Laghubitta Bittiya Sanstha Limited traded at NPR 2,002 per share. The consistent upsurge in microfinance stocks reflects investor confidence in their steady growth potential, driven by their role in expanding access to financial services in rural areas.
Major Institutional Trade: The largest transaction of the day occurred in the Himalayan Bank’s promoter shares (HBLPO), which recorded an enormous turnover of NPR 1.66 billion. This substantial volume was a result of the official trading and recording of shares previously held under the ownership of Pakistani Habib Bank. The buyer was identified as National Life Insurance Company, demonstrating significant institutional appetite and marking one of the major block deals in the banking sector this quarter. This institutional activity, with the HBLPO shares trading at NPR 131 per share, provided a powerful, though non-index-moving, infusion of liquidity and confidence into the overall financial market.
Outlook and Macroeconomic Considerations
The successful breach of the 2,600-point level is a vital psychological catalyst for the market, confirming a recovery trend that has been building over recent sessions. The broad rally, encompassing sectors such as banking, finance, life insurance, and development banks, suggests that the market is currently riding on improved market sentiment, fueled by positive corporate results, forthcoming dividend announcements, and increased retail participation.
Market analysts suggest that the current bullish momentum may be sustained in the short term, given the improved liquidity and the favorable outlook for high-growth sectors like energy. However, experts continue to advise prudence, reminding investors that the Nepalese stock market remains highly sensitive to overarching macroeconomic factors. Interest rate fluctuations, changes in monetary policies by Nepal Rastra Bank, and external economic factors all have the potential to introduce volatility. For the bullish trend to be sustained over the longer term, the market will require continued macroeconomic stability, supportive regulatory policies, and consistently strong corporate performance reports from the listed entities. The combination of sector-specific performance, institutional confidence, and increasing retail participation has positioned NEPSE to reclaim a confident stance in the face of these ongoing challenges.
For More: NEPSE Crosses 2,600 Points