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Dashain & Tihar Effect on NEPSE: Do Festivals Really Bring a Stock Market Rally?

Festivals like Dashain and Tihar don’t just lift consumer spending — they also influence liquidity, investor psychology, and NEPSE trends. This blog explores whether Nepal’s biggest festivals bring a stock market rally, with lessons from past years and strategies for investors in 2025

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Nepalytix
Dashain & Tihar Effect on NEPSE: Do Festivals Really Bring a Stock Market Rally?

Introduction

Dashain and Tihar are more than cultural celebrations in Nepal — they are also economic events that ripple into NEPSE.

Every year, the stock market experiences unique patterns during festival season. Liquidity shifts, remittance inflows, and changes in investor psychology create a mix of opportunities and risks. Some investors believe in a “festival rally,” while others argue that expenses drain liquidity and push the market down.

So what really happens to NEPSE during Dashain and Tihar? Let’s break it down.

1. The Festival–Market Connection

Festivals affect the economy in several ways:

  • Increased Spending: Families withdraw savings for travel, shopping, and celebrations.

  • Remittance Inflows: Many Nepalis abroad send money home, boosting liquidity.

  • Bonus & Salary Payouts: Employees receive Dashain bonuses, creating temporary liquidity.

  • Investor Psychology: Festivals bring optimism, often spilling into market sentiment.

These factors create a push–pull effect on NEPSE.

2. Historical NEPSE Trends Around Dashain–Tihar

Positive Years

  • 2075 B.S.: NEPSE gained in the 15 days before Dashain, boosted by remittance inflows and festival optimism.

  • 2077 B.S.: Despite economic challenges, NEPSE showed small positive moves during festival season.

Negative Years

  • 2076 B.S.: Liquidity crunch and high bank CD ratios kept NEPSE weak even during Dashain.

  • 2080 B.S.: Policy uncertainty and weak demand prevented a festival rally.

Key Insight: Dashain–Tihar rallies are not guaranteed. They depend on liquidity and policy backdrop.

3. How Liquidity Shapes Festival Trends

  • Liquidity Boost: Remittance inflows and bonus payouts add cash to the system, sometimes fueling NEPSE rallies.

  • Liquidity Drain: Household spending on gold, real estate, and consumption often pulls money away from stocks.

  • Banking Sector: CD ratios during Dashain–Tihar heavily influence whether margin lending expands or contracts.

4. Investor Psychology During Dashain & Tihar

  • Optimism Bias: Investors expect markets to rise during festivals, often chasing stocks before holidays.

  • Low Volume: Trading activity falls as many investors focus on family celebrations, reducing market volatility.

  • Speculation: Retail traders sometimes push select stocks to upper circuits during short trading weeks.

5. Sectors Most Affected

  • Banking & Finance: Sensitive to liquidity changes — can benefit if remittances flow in strongly.

  • Insurance: Dividend season often overlaps with Dashain, drawing investor attention.

  • Hydropower: Small-cap hydropower stocks sometimes see speculative moves before holidays.

  • Hotels & Tourism: Benefit from rising domestic and international travel during festivals.

6. Myths vs Reality of Festival Rally

Myth: Dashain and Tihar always push NEPSE higher.
Reality: Festival rallies depend on liquidity, NRB policy, and global conditions.

Myth: Buying before Dashain guarantees profit.
Reality: Poor timing or weak fundamentals can still lead to losses.

7. Strategies for Investors in 2025

✅ Track Liquidity Indicators: Check NRB’s CD ratio and remittance flows before betting on a rally.
✅ Focus on Fundamentals: Don’t buy weak stocks just because it’s Dashain.
✅ Use Caution With Margin Loans: Liquidity can dry up quickly after festivals.
✅ Diversify Across Sectors: Spread investments between banks, insurers, hydropower, and tourism.
✅ Think Long-Term: Festival season is just one part of the yearly cycle.

8. Looking Ahead: Dashain–Tihar 2025

Positive Drivers: Record remittance inflows, tourism recovery, stable NRB policy.
Risks: Global oil prices, possible liquidity tightening, oversupply of IPOs.

If liquidity remains supportive, 2025 could bring a moderate Dashain rally — but investors should remain disciplined.

Conclusion

Dashain and Tihar are deeply tied to Nepal’s economy, and their impact on NEPSE is undeniable. While festivals often bring optimism and remittance inflows, they also drain liquidity through heavy spending.

For investors, the lesson is clear: don’t blindly expect a festival rally. Instead, watch liquidity, policy, and sector dynamics.

In 2025, NEPSE’s festival season may offer opportunities — but only for those who mix optimism with strategy.