Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Nepal’s stock market slipped back into negative territory on Sunday, with the NEPSE index dropping 19.85 points to close at 2,694.20, falling below the psychological 2,700-point threshold amid broad-based selling pressure and weakening investor sentiment.
The decline reflects a market-wide correction as all sectoral indices except trading ended in the red, signaling reduced risk appetite and profit-booking following recent gains. Analysts say the pullback indicates consolidation after the election-driven rally seen in early Magh, with investors now turning cautious amid valuation concerns and liquidity rotation.
Sectoral Performance
The Hotels and Tourism index recorded the steepest fall, declining 1.75 percent, followed by the Hydropower sector, which dropped 1.36 percent. The weakness in hydropower shares—typically a dominant driver of NEPSE movement—added significant downward pressure on the benchmark index.
A total of 201 listed companies saw their share prices decline, reflecting a broad market retreat. Shares of Corporate Development Company hit the negative circuit, indicating heavy sell-side pressure and limited buyer interest at lower levels.
In contrast, 50 companies posted gains, offering limited relief to the overall market. Mithila Laghubitta Bittiya Sanstha emerged as the top gainer, with its share price rising 9.70 percent, close to the upper circuit limit.
Trading Volume and Liquidity Trend
Market liquidity also weakened notably. Total daily turnover fell to Rs 9.10 billion (Rs 9.1094 billion), down sharply from Rs 14.56 billion recorded on Thursday. The drop in transaction value suggests reduced participation and cautious positioning by both retail and institutional investors.
Heavy turnover was concentrated in hydropower and energy-linked stocks:
Aankhu Khola Hydropower Company: Rs 555.2 million
SY Panel: Rs 536.4 million
Radhi Bidyut Company: Rs 389.8 million
Union Hydropower: Rs 371.1 million
The dominance of hydropower counters in trading volume indicates continued speculative interest in the sector, though price action remained mixed.
Market Context
The NEPSE had climbed earlier in the first week of Magh, buoyed by election-related optimism and short-term speculative buying. However, the recent decline signals fading momentum as investors reassess earnings outlooks, interest rate conditions, and near-term economic indicators.
Market observers note that falling turnover alongside index decline typically suggests a cooling phase rather than panic selling, but sustained weakness could lead to further technical corrections if buying support fails to emerge around current levels.
Sunday’s session reinforces the fragile sentiment in Nepal’s equity market, where sector rotation, liquidity flow, and macroeconomic expectations continue to shape short-term direction.
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