NEPSE Index Falls by 8.18 Points on Tuesday, Trading Enthusiasm Remains High
The NEPSE index fell by 8.18 points on Tuesday, closing at 2923.46 points. Over NPR 21.5 billion worth of shares were traded. Out of 13 sectors, 5 showed positive indices. Despite fluctuations, the overall trading volume remained strong compared to the previous day. Although the trading amount decreased from NPR 27 billion, maintaining a trading volume above NPR 20 billion is still considered significant. The future market trends will depend on upcoming trading volumes.
Market Fluctuations: A Result of Profit Booking and Buying Competition
The market fluctuations are attributed to the competition between those booking profits and those buying shares. Recently, the stock market has seen attractive growth, with some companies providing substantial capital gains to investors. This leads to profit booking, where investors sell shares at higher prices, while others continue to buy during bullish runs, causing minor fluctuations.
Investors’ Outlook Remains Positive Despite Corrections
Even if the market experiences a minor correction due to extensive profit booking, investors expect it to regain momentum soon. Historically, the market has rebounded positively after such corrections, and investors believe this trend will continue. Periodic corrections are considered normal and healthy, making the market stronger in the long run.
NEPSE Index Growth: A Broad-Based Rally
Over the past month and a half, the NEPSE index has seen substantial growth, with all sub-indices increasing. Sector rotation has also contributed to the rise in share prices. Investor enthusiasm has surged, with new investors gaining capital benefits and old investors seeing reduced losses. Brokers report that even those who booked profits are reinvesting their earnings back into the market.
Other Investment Options Shrinking, Stock Market Attracts More Investors
With other investment avenues narrowing and the overall economy yet to pick up as expected, the capital market is attracting a diverse range of investors. The possibility of immediate profit booking in a rising market adds to the market’s appeal.
Policy Reforms and Market Enthusiasm
Policy reforms have fueled market enthusiasm, particularly with the central bank implementing measures supportive of the stock market. Improved liquidity and declining interest rates in the banking system have also significantly boosted market growth.
Long-term Market Recovery and Positive Investor Sentiment
After nearly three years of decline, the NEPSE index began its upward trajectory in mid-June. Despite adverse conditions, listed companies have maintained steady profit growth, which is likely to increase dividend distribution over time. This positive outlook has boosted investor sentiment.
Analysts’ Advice for Investors
Analysts advise investors to choose companies with strong financial indicators and high dividend potential. Formulating investment plans and strategies can enhance investment outcomes.
Trading Highlights
On this day, shares of 332 companies were traded, totaling 52.7 million shares. Nepal Finance led the trading with NPR 820 million, followed by Himalayan Reinsurance and Shivam Cements in second and third places, respectively.
This analysis highlights the dynamic nature of the stock market and the factors influencing its fluctuations while emphasizing the overall positive sentiment among investors.
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