NEPSE falls nearly 75 points as market sentiment wavers

The stock market was unable to maintain the gains seen on Tuesday, slipping back into decline on Wednesday as investor confidence weakened.

On Wednesday, the NEPSE index dropped by 74.73 points, settling at around 2,776. The market remained in the red throughout the day, continuing recent volatility. Earlier, the index had fallen by 119 points over Sunday and Monday before posting a modest gain of 19.70 points on Tuesday, which proved short-lived.

Brokers attribute the downturn to recent developments following the formation of the new government. What began as market pressure due to the arrest of political figures has now extended to probing assets of political leaders and bureaucrats and the detention of businesspeople, further unsettling investors. 

Even if those arrested are at fault, such actions tend to have an immediate negative impact on market sentiment, said an investor to the_farsight, noting that investors were unprepared for the rapid pace of measures, which have at times also been difficult to track.

Despite the decline, trading activity increased by nearly a billion rupees. Total turnover reached approximately NRs 12.10 billion, up from NRs 11.11 billion the previous day, reflecting a strong selling pressure. More than 30 million shares of 347 listed securities were traded.

Market performance was broadly negative, with 255 companies recording losses while only 13 saw gains. All sector indices declined, with the “Others” group experiencing the steepest drop of 5.26%.

Sector-wise, banking fell by 2.31%, development banks by 3.18%, finance by 3.03%, hotels and tourism by 2.12%, hydropower by 2.81%, investment by 2.67%, life insurance by 2.02%, manufacturing and processing by 0.39%, microfinance by 1.99%, non-life insurance by 2.22%, and trading by 3.96%.

Nepal Reinsurance Company posted the biggest loss, with its share price falling by 9.84%. Other notable decliners included Saptakoshi Development Bank, National Hydropower, Shivashree Hydropower, and Himal Dolakha Hydropower.

On the brighter side, six recently listed companies hit the upper circuit limit, gaining around 10%. These included Reliance Spinning Mills, Super Khudi Hydropower, Ridgeline Energy, Suryakund Hydropower, Bhujung Hydropower, and Hotel Forest Inn.

In terms of trading volume, Himalayan Reinsurance led the market, followed by Api Power and Ngadi Group Power. Other actively traded companies included Shivam Cements and Nepal Reinsurance.

Overall, while trading volume increased, the widespread decline across sectors reflects short-term uncertainty in the market. Since the formation of the new government on Chaitra 13, the NEPSE index has fallen by approximately 174 points.