The Nepal Stock Exchange (NEPSE) index recorded a positive trajectory during the trading week of May 18 to 22, gaining momentum ahead of the highly anticipated national budget announcement.

The benchmark index closed the week at 2,758.49 points, marking a gain of 26.55 points or 0.97 percent from the previous week’s close of 2,731.94 points. Reflecting broad-based buying sentiment, the Sensitive Index, which measures the performance of Class ‘A’ blue-chip companies, edged up by 4.34 points or 0.93 percent to settle at 471.89 points.

The rise in the index translated into higher investor wealth. Market capitalisation increased to Rs 4.704 trillion from Rs 4.659 trillion a week earlier. Overall investor wealth expanded by around Rs 45 billion over the five trading days, driven by positive sentiment ahead of the fiscal policy announcement.

Except for the trading sector, all major sub-indices ended the week in positive territory.

The hydropower sub-index emerged as the strongest performer of the week, surging by 82.52 points or 2.16 percent to close at 3,903.48 points. The sector’s heavyweight in the index acted as a key driver of the overall market gain.

The finance sub-index also posted a solid increase of 1.54 percent, followed by development banks at 1.35 percent. Large-cap segments, including life insurance, added 113.41 points or 0.91 percent, while the banking sub-index rose 11.74 points or 0.81 percent, helping stabilise overall market movement.

In contrast, the trading sector recorded a poor performance, falling 24.51 points or 0.65 percent to close at 3,767.66 points.

Despite gains in prices, overall weekly liquidity declined slightly compared to the previous week. Total turnover stood at Rs 17.756 billion, down from Rs 18.474 billion, a reduction of Rs 718 million. This indicates that investors remained relatively cautious and adopted a wait-and-watch approach ahead of the upcoming budget.

However, momentum strengthened towards the end of the week. On the final trading day of May 22, turnover reached Rs 4.49 billion, significantly higher than Thursday’s session, which was around Rs 3.89 billion. The late-week surge reflected higher trading volumes and selective accumulation in key stocks.

Market analyst and former banker Jagannath Dhungel said buying pressure in the last hour of trading on May 22 helped lift both volumes and the index.

“Buyers pushed the market in the last hour, which increased volume,” Dhungel said.

He added that this momentum could carry into the next trading week, with initial movement likely positive on Monday if sentiment holds.

Bungal Hydro Limited was the standout performer of the week, surging 38.01 percent to close at Rs 814.00, close to its 52-week high of Rs 822.00.

Ankhu Khola Jalvidhyut Company emerged as the most active stock in terms of liquidity and volume. It recorded a weekly turnover of Rs 928.4 million with 2.478 million shares traded, while advancing 13.62 percent to close at Rs 402.00.

Newly listed Crest Micro Life Insurance Limited saw strong demand, rising 15.84 percent to close at Rs 1,318.00.

On the losing side, Three Star Hydropower posted the steepest decline, falling 7.35 percent to settle at Rs 555.00.

City Hotel faced double pressure, featuring among the high-turnover stocks with Rs 372.3 million in trading value while also appearing on the top losers list, dropping 6.55 percent to close at Rs 371.00. High-priced manufacturing blue-chip Bottlers Nepal (Balaju) also declined 5.34 percent to close at Rs 14,387.10.

Dhungel said the market moved higher this week as investor confidence gradually improved ahead of the budget announcement, while easing concerns related to high-profile arrests in the money laundering probe also supported sentiment.

He added that the expectation of continued upside after corrections, along with the anticipation of favourable budget provisions, encouraged buying activity.

He expressed optimism that the market could maintain its upward trajectory in the coming week, depending on policy signals from the budget and continued participation of institutional money.