This article discusses technical trends in the Nepal Stock Exchange and how factors like the upcoming monetary policy, Ashad-end settlements, and new SEBON leadership could shape the market’s future.
Market Technicals Show Recovery Signs
The Nepali share market has been under continuous pressure for last few weeks, but analysts believe it has now reached an important turning point. Looking at technical signs, upcoming monetary policy, Ashad-end transactions, and regulatory updates, many are guessing that market is forming a bottom.
According to technical analysis, the NEPSE index is showing signs of recovery after returning from near the 2600 level. On daily time frame, the RSI has moved up from the oversold zone. In short-term charts, the market is making Higher Highs and Higher Lows.
However, the area between 2670 and 2700 remains a strong resistance. If the index can cross this level, there will be a positive change in market structure. Analysts think that even if market falls back to 2600 level, it is very unlikely to go below that. If it forms a new Higher Low above 2600 and goes up, it could signal starting of a medium-term bull run.
Monetary Policy and High Liquidity
Nepal Rastra Bank is preparing to bring the monetary policy for fiscal year 2083/84 within final week of Ashad. This time, main focus of central bank seems to be increasing credit flow to the private sector. Although there is plenty of liquidity in the banking system, credit expansion has not happened, so policy will target this issue.
For stock market, there is low chance of major big announcements. But minor changes in broker margin lending, bank investment rules, and other policy ease could bring a positive impact.
Ashad-End Impact and New SEBON Chairman
Like every year, some investors sell shares in Ashad-end for tax payments and financial adjustments. But history shows that institutional and long-term investors use this time to buy more shares. Because of this, buying pressure might increase in the last week of Ashad.
Positive expectations have also increased after appointment of the new chairman at Securities Board of Nepal (SEBON). In early talks with stock brokers, the chairman gave positive feedbacks about market reforms. If SEBON, Nepal Rastra Bank, and the government work together to create demand, market will get more energy.
Additionally, the government is planning to establish an Asset Management Company to manage non-banking assets of banks. If this happens, it will help banks manage their bad assets easily, which will ultimately bring positive impact on the entire capital market.
Right now, there is no huge excitement in the market. But combining technical signs, monetary policy hopes, Ashad-end buying, and regulatory reforms, market could slowly head in positive direction. Investors should focus on facts and policies rather than emotions while making decisions.
AI Disclaimer: This article was originally published on https://bajarkochirfar.com. It has been translated with the help of AI. For the best understanding and accurate facts, we recommend reading the original Nepali version.
