Kathmandu-As the election atmosphere heats up in the country, Nepal’s stock market has gained momentum. Despite technical problems in the Digi Hub operated Trading Management System that blocked trading for investors of around a dozen broker firms, Nepal Stock Exchange (NEPSE) recorded its highest turnover in six months on Sunday.

Analysts see this as a sign of strong market fundamentals and rising capital inflow.

Investors of 11 broker companies using Digi Hub’s TMS had been unable to trade for several days. Even during the market rise, transactions through these brokers remained suspended.

Following NEPSE’s new API policy that allows privately developed TMS platforms, several brokers adopted Digi Hub’s system. Some have since launched their own platforms. Nasa Securities has introduced its in house system, Nasa X.

On Sunday, the NEPSE index jumped 57.56 points to close at 2772.17, a gain of 2.12 percent. Analysts describe the rise as a recovery in market sentiment after recent volatility.

Technical indicators also show strength. The index has moved above the 2486.43 to 2723.94 range. Moving averages MA 20, MA 50, and MA 200 remain positive, pointing to medium and long term improvement. Short term indicators suggest an overbought condition as prices approach the upper Bollinger Band.

Total turnover reached Rs 13.78 billion, the highest in six months, despite trading restrictions at Digi Hub based brokers. Analysts say full participation could have pushed turnover even higher.

Analysts link the rally to election related spending, increased economic activity, and higher cash circulation. In a politically uncertain environment, investors appear to be shifting funds to the stock market as a relatively safer option.

If the index holds the 2770 to 2780 range, analysts expect a test of the 2800 level. Overbought signals, however, raise the risk of a short term correction, prompting calls for caution.

Nepal Stock House, Roadshow Securities, Arun Securities, Opal Securities, Swarnalakshmi Securities, Kalika Securities, NAIMB Stock Markets, Himalayan Brokerage, Dynamic Securities, and Secured Securities currently use Digi Hub’s TMS. Investors were unable to trade through these firms on Sunday.