Will NEPSE Bullish After New Government ?

Nepal Stock Exchange (NEPSE) is witness a sharp decline today despite a surge in investor optimism as a new government prepares to modernize the Nepal Financial Market. The RSP pledged to finalize the long stalled regulatory framework for a Commodity and Derivative Market within the first year of government. This includes empowering the Securities Board of Nepal (SEBON) to issue licenses for formal derivative exchanges.

Unlike the stagnation seen in late 2024/25, the 2026 market is backed by much stronger macroeconomic fundamentals, "says by the investor" making the todays fall is profit booking not from the selling pressure.

What Happens Next?

The "Bullish" momentum is expected to continue if market addresses three key areas:

• 3,000 Point Breakout: If the index sustains above 3,000, technical analysts predict the next resistance at 3,200.

• Sector Rotation: While Hydropower and Manufacturing  led the recent rally, "smart money" is reportedly moving into undervalued Commercial Banks, which have yet to see a major breakout. Banks are preferred as a low risk and low return companies by the investor.  

• Policy Clarity: The sustainability of this rally depends on whether the new Finance Minister simplifies market structure, eases the NRB’s risk weightage on share loans, introduce of new stock exchange and implementation of derivative market.

While sentiment is high, the market is no longer just running on "hype." The 2026 rally is anchored in low interest rates and high liquidity, suggesting that any dip during the government transition will likely be met with aggressive buying but it all depends upon the investor confidence and market fundamental if the investor are not willing to put their money into market then the NEPSE will not sees the Bullish Trend. The volume of the market is rising sharply that indicates the bullish trend however today's market witnessed the strong fall.