Nepal Stock Exchange halts trading after unprecedented surge in NEPSE index

KATHMANDU: In an unexpected turn of events, the Nepal Stock Exchange (NEPSE) witnessed a remarkable surge, prompting the suspension of trading for the day. The NEPSE Index experienced an unprecedented increase of 6.0% at 12:04:42, triggering its second circuit breaker on Monday.

The initial circuit breaker was activated when the NEPSE index surged by 4 percent or 79 points within just 3 minutes of the trading session’s commencement. This abrupt rise in market activity prompted a temporary halt to trading to allow for stabilization.

However, within 20 minutes of the market reopening, another circuit breaker was triggered as the NEPSE index recorded a 5 percent increase in trading activity. Subsequently, the index witnessed an additional surge of 98 points, reaching a total of 2059 points.

As per the circuit rules, the current trading hiatus spans 240 minutes. The rules dictate that if the market experiences a 4 percent jump or drop within the first hour of trading, it activates an initial circuit break. Further movements of 1 percentage point, totaling a 5 percent shift, lead to a second circuit break.

Moreover, if the market persists in its movement after the second halt, resulting in a 6% increase or decrease from the previous day’s closing value, it triggers a third halt lasting 240 minutes, effectively closing the market for the day.

Investors and market participants are closely monitoring the situation as the NEPSE Index experiences unusual fluctuations. The suspension of trading underscores the need for market stability, and regulatory measures are in place to manage such exceptional circumstances.

The unexpected surge in the NEPSE Index highlights the dynamic nature of the stock market and the importance of risk management strategies for investors in volatile trading environments.