The floor breaks: 2,616 low, 90 of 111 hydro names down, and the RSML block buyer is gone

Markets Today

NEPSE closed at 2,622.48, down 19.34 points (‑0.73%) the largest single-day decline in three weeks and the first close below the 2,629–2,633 zone that had held four consecutive tests.

The level is gone. Today's low of 2,616.18 is 13 points below the floor this report has been tracking since 11 August. The index opened at 2,644.42, made 2,646.86 in the first leg and then sold for the rest of the session, closing 6.30 points off the low with no meaningful bounce. Twenty-two of the day's 30-point range was spent going one direction.

The breadth is the worst of the entire series: 81 advanced against 255 declined, 11 unchanged, 347 scripts traded. An A/D ratio of 0.32 matching 7 August's reading exactly, which was the worst in this report's coverage. Three names fell for every one that rose.

The sector-level breadth is more damning than the index:

• Hydropower: 18 up, 90 down out of 111 traded

• Commercial Banks: 3 up, 17 down out of 21

• Others: 0 up, 9 down not a single gainer

• Investment: 1 up, 7 down

• Life Insurance: 2 up, 12 down

Every single sector closed with negative breadth except Trading, which is two stocks. Forty-nine scripts fell more than 2%; only 19 rose more than 2%. Median move ‑0.64%, the most negative of the series.

Market capitalisation fell to Rs 4.51 trillion from Rs 4.55 trillion, a Rs 37 billion single-day decline, the largest of this stretch.

And once again the turnover print needs correcting. Headline turnover is Rs 5.07 arab. ADBLB87, the same ADBL debenture that distorted Friday's number printed Rs 50.68 crore on five transactions, 500,000 units at 1,012–1,015, the largest at 11:52:55 AM. That is 10.0% of the market in one non-equity line. Equity turnover ex-debenture: Rs 4.57 arab.

That is still a real increase, and it matters. Volume was 1.52 crore units, the highest of this entire two-week stretch on 55,246 transactions. Participation was genuinely heavy. It was heavy on the way down.

Rising volume into collapsing breadth on a broken support level is the clearest distribution signal this tape has produced.

Index Snapshot

Headline turnover: Rs 5.07 arab
Equity turnover ex-ADBLB87: Rs 4.57 arab
Volume: 1.52 crore units
Transactions: 55,246
Scripts traded: 347
Market cap: Rs 4.51 trillion

Sensitive fell 0.55%, outperforming NEPSE by 18bps. Large caps held up marginally better, but with 17 of 21 commercial banks down, "better" is relative.

Sectoral Indices Performance

Twelve of thirteen sectors red. The lone exception, Trading at +0.41%, is BBC (+0.46%) and STC (‑0.04%) a two-name index and not a signal.

Manufacturing & Processing was the worst at ‑1.40%, and it is the exact reversal of yesterday. Monday it was the best sector at +1.30% on RSML's +11.17% which came with Rs 31.53 crore of block trades. Today RSML fell 4.10% to 2,725.00, trading 2,898.00 down to 2,720.00 and closing near the low. SAIL fell 4.65%, ECL and SOPL both red.

The block buyer stopped, and the price went with it. This report flagged yesterday that "whether the price holds when the block buyer stops is the whole question." It held for zero sessions.

Hydropower's 18 up / 90 down is the number to remember from today. The sector took Rs 240.41 crore 47.4% of the market, up from Monday and 81% of its traded names fell. Two weeks of money crowding into this sector has now produced a sector index at 3,710.41, below where it sat on 7 August with breadth in ruins.

Banking at 3 up / 17 down completes the picture. Rs 42.55 crore of turnover, the second-highest sector total, and three gainers. PRVU ‑1.09%, GBIME ‑1.61%, NIMB ‑1.01%, KBL ‑1.62%, NICA ‑1.56%, MBL ‑0.96%. A full week of positive earnings coverage has now been followed by +0.39%, ‑0.14%, ‑0.50%, ‑0.59%.

Market Breadth

A/D ratio 0.32. The series: 0.32 → 0.51 → 0.99 → 0.70 → 1.66 → 0.67 → 0.35 → 0.32. Back to the worst reading of the coverage period.

Technical scan: 4,677 signals, 1,141 bullish (24.40%) against 1,825 bearish (39.02%).

Bearish share is now back above 39%, the threshold Friday's report named as the level that would kill the idea of a base forming quietly underneath a flat index. The four-session improvement (41.80% → 40.41% → 38.76% → 37.14%) has now fully reversed across two sessions (38.44% → 39.02%). The bull/bear gap has widened from 11.7 points at its best to 14.6 today.

Winners & Losers

Top Gainers

Excluded: SAPIL (+14.99%, 150 units, 15 trades) and MEPDL (+14.98%, 970 units, 97 trades) both new listings circuiting daily on negligible volume. SAPIL has now closed limit-up four consecutive sessions on 15 to 70 units per day. Also excluded: NLO (+2.97% on 1 trade), SBLD89 (2 trades), NBLD85 (1 trade), CIZBD86 (10 units), NICAD2091, EBLD91, HLICF, LVF2.

The board topped out at +4.78%, and only one gainer had real money behind it. UMHL Union Hydropower rose 2.33% on Rs 16.47 crore across 452 transactions, trading 580.00 to 646.00. It was the fifth-largest turnover on the exchange and the only name in the top ten by turnover to close green.

That is the entire bull case for today: one mid-cap hydro name.

BHCL failed. Yesterday's report named it the sole surviving breakout candidate up 15.7% across two sessions and "the only name on this board to hold and extend a gain." Today it closed at 552.00, down 0.36%, after trading 574.00 down to 552.00 and closing at the session low on Rs 7.09 crore. It didn't collapse, but it opened at the high and closed at the low, which is how every prior candidate began failing.

That makes it eight consecutive failed breakouts. Investment's sector surge, GHL, SKHL, ULHC's double circuit, CORBL, UHEWA, KKHC and now BHCL. Nothing on this exchange has held a gain for three consecutive sessions since before 7 August.

Top Losers

Excluded as non-signal: SEF (‑7.14%), LUK (3 trades), SLCF, MBLEF, SIGS2 mutual fund units on thin trade counts.

KKHC is the collapse of the week. It opened at 340.00 its high and closed at 299.00, down 9.67%, on Rs 25.26 crore and 1,464 transactions, the third-highest turnover on the exchange. Its low was 298.00, meaning it closed one rupee off the bottom.

The five-session sequence tells the whole story of this market: ‑1.23% (Thu) → +10.09% (Fri) → ‑6.33% (Mon) → ‑9.67% (Tue). From 352.30 on Friday to 299.00 today down 15.1% in two sessions, with turnover rising on the way down. Friday's report called KKHC "the one name to follow" and said holding above 340 would make it the first real trend in a week. It opened at exactly 340 today and went straight through it.

SMJC is the mirror image. Monday's second-best gainer at +11.06% (480.00); today the worst loser at ‑10.62% (429.00). Opened at its 456.00 high, closed at 429.00 near the 426.80 low. A 21.7-point round trip in two sessions.

SAPDBL fell 6.65% on Rs 6.73 crore and 652 transactions, opening at its 782.00 high and closing at its 730.00 low, the second consecutive session it has been among the heaviest decliners.

HATHY fell 5.16%, its second straight day near the bottom of the board (‑3.60% Monday). Investment sector breadth of 1 up / 7 down.

Turnover & Volume Leaders

Top ten = 39.9% of turnover, top twenty = 52.1%. Concentration rose again from Monday.

Nine of the top ten turnover names closed red. UMHL is the only exception. That is what an A/D of 0.32 looks like at the top of the book, the money went in and every place it went, it lost.

SOHL's one-day bounce is over. It rose 5.66% Monday after six consecutive sessions without a gain; today it fell 2.99% to 687.80 on Rs 39.15 crore and 2,359 transactions, its heaviest turnover in a week. It opened at 700.00, made 725.00, and closed at 687.80 against a 683.00 low. Heavy volume, closed near the low, gave back half the bounce.

RIDI made another new low at 358.00 intraday, closing 359.60. The sequence is now seven consecutive declines: 386.00 → 377.00 → 375.00 → 371.00 → 367.90 → 361.60 → 359.60.

GHL is down five straight from its spike: 256.70 (+11.90%) → 249.00 → 242.50 → 235.60 today (‑2.85%). It has given back the entire 11.90% move and then some, and traded down to 234.60 intraday.

Most transacted: SGHL (3,326), SOHL (2,359), KAHL (1,811), KKHC (1,464), TPKHL (1,111), PRVU (964), SOPL (906), RSML (838), RIDI (793), BHCL (773).

SGHL tops the transaction count for a fifth consecutive session 3,326 trades for Rs 8.57 crore, an average ticket of Rs 25,800. It closed ‑1.04%.

Bulk/block activity: Rs 4.52 arab across 49,679 block transactions, average deal size Rs 90,987. The top four blocks were all ADBLB87: Rs 10.15 Cr, Rs 10.14 Cr, Rs 10.14 Cr and Rs 10.12 Cr, each 100,000 units totalling Rs 40.55 crore with RSML fifth at Rs 2.56 crore. Top five by quantity: PRSF (496,571) and SIGS3 (283,791 / 265,456 / 265,456 / 234,544).

Three of the last four sessions have had a single instrument dominate the block tape: ADBLB87 Rs 50.68 Cr (Friday), RSML Rs 31.53 Cr (Monday), ADBLB87 Rs 40.55 Cr (today). The ADBL debenture has now placed roughly Rs 121 crore across two sessions in identical 100,000-unit tranches. That is a structured institutional placement running through the exchange, and it has inflated the headline turnover figure on both days it appeared.

Previous Session Recap: Monday, 17 August

NEPSE closed at 2,641.82 (revised), down 2.25 points, on breadth of 71 up / 203 down, an A/D of 0.35. Headline turnover Rs 5.53 arab, inflated by RSML's Rs 31.53 crore across five blocks; RSML closed +11.17% and carried Manufacturing & Processing to +1.30%, the best sector.

KKHC failed the test set out in Friday's report, closing 330.00 (‑6.33%) after Friday's +10.09%. Only two sectors closed green and both were single-name stories. NEA reported a 43% profit decline.

Two-week context: the eight sessions from 7 to 18 August: 2,650.08 → 2,641.06 → 2,641.85 → 2,642.40 → 2,651.21 → 2,643.83 → 2,641.82 → 2,622.48. Net ‑27.60 points, or ‑1.04%. Seven of those eight sessions had negative breadth. The index spent seven sessions in a 22-point band and then broke down out of it.

Top Stories in Nepal

• Rs 70.07 billion investment secured for the 420 MW Tila-2 hydropower project. Urja Tila Power Company signed an investment agreement with a bank consortium led by Everest Bank, completing a key stage toward financial closure. The structure is Rs 52.55 billion debt and Rs 17.52 billion equity, with a PPA already signed with NEA for 296.74 MW and a generation licence in hand. Construction is targeted at four years, with a dam in Tilagufa Municipality and powerhouse in Khandachakra, Kalikot. Investors include Stream Investment, Urja Impact Fund and Robbins USA.

  This lands one session after NEA's 43% profit decline. Rs 52.55 billion of new bank debt into a sector whose sole offtaker just reported a profit collapse is worth watching, for the banks as much as for the hydro names.

• Four companies seek SEBON approval for IPOs. Further supply queued into a market with deteriorating breadth. SEBON's pipeline has been running heavy for months; the number of hydropower companies awaiting IPO approval has been the largest single category.

• Everest Bank opens a new extension counter in Tansen, Palpa. Notable mainly because Everest Bank also leads the Tila-2 lending consortium.

Corporate Actions & Events

BJHL rose 5.89% into its own lock-in expiry on Monday. Both dated expiries are now within days and neither is priced. On a day when 255 of 347 names fell, incoming supply from two lock-in releases and four fresh IPO applications is arriving into the thinnest bid of the entire stretch.

What to Watch

The 2,629–2,633 floor is gone, and 2,616.18 is the new reference. Four tests held; the fifth broke and it broke by 13 points on the highest volume of the series. Below here there is no level this report has been tracking, the next reference points are round numbers rather than tested support. On the upside, 2,646.86 is today's high and 2,676.40 is now 54 points away which is further than at any point in this coverage.

Volume at 1.52 crore units, the highest of the stretch on an A/D of 0.32. This is the combination that matters. Heavy participation into collapsing breadth on a broken support level is distribution, not capitulation, because there were no circuits and the selling was orderly. Watch whether volume stays above 1.2 crore tomorrow: sustained heavy volume with negative breadth means supply is still being worked through, while a sharp volume drop would suggest sellers have finished.

Hydropower at 18 up / 90 down is the sector's worst reading of the coverage. It took 47.4% of turnover to produce ‑0.92% and 81% of its names lower. Combined with NEA's 43% profit decline and Rs 52.55 billion of fresh bank debt going into Tila-2, the sector now has a deteriorating offtaker, heavy new leverage and a tape where every spike has failed. That is a structural problem, not a rotation problem.

Eight consecutive failed breakouts, and BHCL was the last candidate. It opened at the high and closed at the low. There is now no name on this board holding a multi-day gain. Until one does, fading strength is the only pattern this market has rewarded and UMHL, the sole green name in the turnover top ten is the next candidate to test that with.

Banks: 3 up out of 21, on Rs 42.55 crore. Four consecutive sessions of negative or flat bank closes following a full week of double-digit profit growth announcements. Either the earnings are being discounted for asset quality or the selling is indiscriminate. Either way, with banks the heaviest weight in the index, a NEPSE recovery cannot happen without them.

Read the block tape before the turnover print. Three of the last four sessions had a single instrument dominating blocks. ADBLB87 alone has placed roughly Rs 121 crore in identical 100,000-unit tranches across two sessions. Today's Rs 5.07 arab is Rs 4.57 arab of actual equity trading which is genuinely the highest of the week, but 10% less than the headline suggests.