The Nepal Stock Exchange (Nepse) posted a broad-based decline during the trading week of July 6 to 10, with the benchmark index falling 52.62 points, or 1.98 percent, to close at 2,600.78.

The index had ended the previous week at 2,653.40.

The Sensitive Index, which tracks Class 'A' companies, also declined by 1.35 percent to 453.60.

The week's losses reduced the market capitalisation to Rs 4.46 trillion from Rs 4.55 trillion a week earlier, wiping around Rs 90 billion from investors' wealth.

Despite the decline in share prices, market activity picked up. Weekly turnover rose 7.26 percent to Rs 19.65 billion from Rs 18.32 billion the previous week. Average daily turnover increased to Rs 3.93 billion from Rs 3.66 billion.

Market analysts said the rise in turnover, despite falling prices, indicates that sellers are dominating the market, signalling increased profit-taking and loss-cutting by investors.

All sectoral indices ended the week in negative territory.

The finance sector recorded the steepest decline, falling 3 percent to 2,388.47. The manufacturing and processing index dropped 2.81 percent to 10,257.21, while the hydropower index fell 2.67 percent to 3,594.18.

The hotel and tourism sector lost 2.66 percent to close at 7,174.30. The trading index slipped 2.54 percent to 3,299.28, development banks declined 2.26 percent to 5,522.03, and the microfinance index fell 2.01 percent to 4,579.86.

Among individual stocks, a handful of hydropower companies bucked the broader market trend.

Kalanga Hydro gained 30.57 percent to Rs 510, Sanigad Hydro rose 23.07 percent to Rs 487, and Snow Rivers advanced 18.74 percent to Rs 820.

At the other end, Three Star Hydropower was the biggest loser, plunging 25.60 percent to Rs 340. Bhujung Hydropower dropped 15.89 percent to Rs 699.80, while Nepal Finance fell 15.36 percent to Rs 567.10.

Ankhu Khola Jalvidhyut Company led the market in both turnover and trading volume. Its shares worth Rs 563.6 million changed hands during the week, with more than 1.61 million shares traded, although its price fell 2.60 percent.

Reliance Spinning Mills recorded the second-highest turnover at Rs 504.2 million. Its shares closed at Rs 3,034.90, down 5.16 percent. Global IME Bank traded 1.194 million shares during the week, while City Hotel saw 966,000 shares traded as its stock declined 9.10 percent.

Chartered accountant and market analyst Manish Aryal said the market outlook for the coming week remains positive.

He said recent policy developments, including Prime Minister Balendra Shah's meeting with private sector representatives to address business concerns and the Securities Board of Nepal's plan to introduce a comprehensive capital market development roadmap, have improved investor sentiment.

Aryal said seasonal pressure from quarterly bank loan interest payments has largely subsided. Investors with margin loans typically sell shares ahead of the mid-July payment deadline to meet interest obligations, and much of that selling has already taken place.

From a technical perspective, he said the market has repeatedly held above the key support zone of 2,580 to 2,600, indicating consolidation rather than a breakdown.

"The market appears to be consolidating and preparing for an upward move," Aryal said.