The Nepal Stock Exchange (NEPSE) has seen a remarkable surge over the past month, with the benchmark index climbing 386.9 points, signaling a strong bullish momentum in the secondary market.
As per official data, the NEPSE index closed at 2,595.75 points on June 26, and by Thursday, it had reached 2,982.65 points. Out of the total trading days during this period, the market dipped on only five occasions, with the rest witnessing continuous gains. This consistent upward trend has greatly boosted investor confidence.
Stockbrokers described the momentum as distinctly bullish. “Investors are encouraged to inject more capital as the market index approaches 3,000 points,” noted one broker, emphasizing the psychological and financial incentives behind the surge.
The rise in the market index has been accompanied by a sharp increase in daily transaction volumes, which jumped from Rs 5–6 billion to around Rs 18 billion. This substantial trading volume lends strength to the rally, indicating solid investor participation rather than speculative spikes.
Investor optimism is also fueled by impressive capital gains. During the review period, the market capitalization rose to Rs 4.977 trillion, generating more than Rs 653 billion in investor profits.
Experts attribute the rally to recent monetary policy reforms introduced by the Nepal Rastra Bank for the fiscal year 2025/26. Key policy rates were trimmed: the bank rate was reduced from 6.5% to 6%, the policy rate from 5% to 4.5%, and the deposit collection rate from 3% to 2.75%. These changes prompted 13 out of 20 commercial banks to slash their interest rates, with deposit rates falling by an average of 0.2 percentage points, and loan interest rates, including margin loans, dropping below 8% per annum.
In another boost to market liquidity, the central bank reduced the risk weightage on loans against shares from 125% to 100%, and raised the lending limit from Rs 15 million to Rs 250 million. These regulatory adjustments have encouraged more borrowing for stock investment, thereby fueling the current bullish run.
With improved investor confidence, increased market liquidity, and favorable policy shifts, market analysts believe the NEPSE could breach the 3,000-point mark in the near future—barring any unforeseen economic disruptions.
