Post-Tihar Market Outlook 2025: Is NEPSE Ready for a Bullish Comeback?

Introduction: Hope Returns to NEPSE After Tihar

Tihar 2025 has ended, but the festival’s energy seems to be spilling into the stock market. After months of volatility and subdued confidence, NEPSE is finally showing green candles. A decline in gold prices, easing liquidity, and steady remittance inflows have created an environment ripe for revival.

Historically, the post-Tihar phase marks a psychological turning point for Nepali investors. As festive spending cools and savings grow, capital often shifts back toward investment avenues — and this year, equities are standing out as the preferred choice.

1. The Key Drivers of NEPSE’s Post-Tihar Momentum

a. Falling Gold Prices Are Unlocking Liquidity

With gold prices dropping after Tihar, many investors are redirecting funds from gold into stocks. During the festival, gold demand peaked — but once prices corrected, investors sensed better value in equities, especially as bank CD ratios improved.

b. Banking Liquidity Eases

Nepal Rastra Bank’s latest data shows a gradual reduction in CD ratios, meaning banks have more room to lend. This directly fuels stock market participation through:

• Margin lending

• Business expansion loans

• Real estate and SME investment

When liquidity returns to the system, NEPSE typically follows with a lagged but consistent rise.

c. Stable Macroeconomic Conditions

Inflation has remained moderate, remittances are strong, and the trade deficit is narrowing — a rare combination that builds confidence in the economy’s resilience. Investors are seeing more predictability, which reduces risk aversion.

2. Sector-Wise Trends: Who Benefits the Most?

The Banking and Insurance sectors are expected to lead NEPSE’s post-Tihar rally, while Hydropower stocks could attract longer-term investors seeking steady returns.

3. Market Psychology: From Fear to Cautious Optimism

Investor sentiment in NEPSE often mirrors festival moods. During major celebrations like Tihar, optimism spreads, but actual trading volumes dip due to holidays. Once markets reopen, a psychological rebound follows, supported by fresh capital and renewed confidence.

This shift is visible now — investors are:

• Buying fundamentally strong stocks they missed earlier.

• Avoiding overvalued scrips, focusing more on dividend yield and P/E ratio.

• Watching global cues but reacting more to domestic liquidity and NRB policy.

The result? A cautiously positive market mood, setting the stage for gradual recovery rather than a short-term spike.

4. The Global Angle: Why It Matters for NEPSE

Nepal may be a small market, but it’s not isolated from global trends.

• Gold and USD movements influence import costs and investor psychology.

• Oil prices affect transport and manufacturing margins.

• Indian and Chinese market performance indirectly impacts investor sentiment in Nepal through trade and remittance links.

Right now, global stability is favoring emerging markets — and NEPSE could quietly benefit if this momentum continues through the winter months.

5. What the Data Suggests

Let’s consider some indicative numbers (as of late October 2025):

• Gold prices have dropped by nearly NPR 2,500 per tola since peak Tihar levels.

• NEPSE index has rebounded from around 1,900 to 2,050 in just a few sessions.

• Daily turnover has improved above NPR 4 billion, showing renewed participation.

These metrics suggest liquidity is flowing back into the stock market — a healthy sign after months of sluggish activity.

6. Challenges Still Lurking

While the short-term picture looks promising, investors should remain alert to:

• NRB’s potential tightening if credit growth surges too fast.

• Political uncertainty or delayed policy reforms.

• External shocks, such as oil price volatility or global inflation resurgence.

Thus, the post-Tihar rally may be gradual rather than explosive, sustained only if macroeconomic stability continues.

7. Strategy for Investors

Here’s how different types of investors can navigate the post-Tihar environment:

a. Short-Term Traders

• Focus on liquid stocks in the banking and hydropower sectors.

• Avoid chasing rallies; wait for volume confirmation before entry.

b. Long-Term Investors

• Accumulate fundamentally sound stocks with low P/E ratios and steady dividends.

• Diversify between financials, hydropower, and insurance.

• Use dips to average positions rather than time the top.

c. Defensive Investors

• Keep partial holdings in gold or mutual funds for balance.

• Avoid high-volatility stocks until the uptrend is confirmed.

8. NEPSE Outlook for November–December 2025

Based on current trends:

• Base support: Around 1,950 level.

• Target zone: 2,150–2,200 if liquidity remains strong.

• Volume outlook: Improving daily turnover is key to confirming a bullish trend.

If macro data (remittance, CD ratio, and inflation) remains stable, NEPSE could enter a slow but sustainable uptrend by mid-November.

Conclusion: The Post-Tihar Glow May Last Longer Than Usual

This year’s post-Tihar scenario paints a refreshing picture for Nepal’s financial markets. Gold’s decline, improved liquidity, and revived investor sentiment are aligning to give NEPSE a much-needed push.

While challenges persist, the signs of economic balance and market confidence are stronger than they’ve been in months. If policy stability continues and liquidity remains ample, the coming quarter could mark the beginning of NEPSE’s next growth phase.

For investors, the message is clear — the market is shifting gears. Those who stayed patient through the turbulence may now be rewarded, as Nepal’s post-Tihar season sets the stage for cautious optimism and renewed opportunity.