Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Nepal’s stock market declined on the first trading day of the week even as a major regulatory reform came into force, allowing wider price movements in listed securities. The benchmark index of the Nepal Stock Exchange (NEPSE) dropped by 13.17 points to close at 2,825, reflecting cautious investor sentiment amid the transition to a new trading regime.
The market opened on a relatively positive note, with the index climbing to an intraday high of 2,845 within the first six minutes of trading—its highest level for the day. However, selling pressure soon dominated the session, pulling the index into negative territory by the close.
This comes a day after NEPSE had recorded a modest gain of around 5 points, indicating short-term volatility as investors adjust to the revised trading framework.
From Monday, NEPSE has officially implemented a new rule allowing share prices of listed companies to fluctuate by up to 15 percent in a single trading day. The reform replaces the previous 10 percent cap and is part of the fourth amendment to the “Trading Operation Bylaws, 2082,” approved by the exchange’s board.
The move is seen as a significant shift in Nepal’s capital market structure, aimed at improving price discovery, enhancing liquidity, and aligning the market more closely with international practices. However, analysts note that the immediate impact may include heightened volatility, especially in smaller-cap and speculative stocks.
Market activity also weakened alongside the index decline. Total daily turnover fell to NPR 5.43 billion, down from NPR 7.46 billion recorded in the previous trading session, signaling reduced participation and cautious positioning by investors.
Out of the traded stocks, prices of 65 companies increased, while 197 declined and 6 remained unchanged, reflecting a broadly bearish market breadth.
Among sectoral indices, only the hotel and tourism sector managed to post gains, rising by 1.01 percent. The uptick suggests renewed investor interest in tourism-linked stocks, possibly driven by expectations of recovery in travel demand.
All other sectors closed in the red:
Notably, the magnitude of sectoral losses remained below 1 percent across the board, indicating controlled downside despite broader market weakness.
With the new 15 percent fluctuation rule in effect, four companies recorded maximum allowable gains for the day. These include:
The sharp rise in these stocks underscores how the expanded price band is already influencing trading behavior, particularly in momentum-driven counters.
Other notable gainers included:
On the losing side, Dolti Power Company posted the steepest decline of 5.35 percent, followed by Asian Hydropower Company, which fell by 4.50 percent.
In terms of trading volume, the most actively traded stocks included:
The implementation of the 15 percent daily price movement cap marks a structural change in Nepal’s equity market. While it offers opportunities for higher returns and improved liquidity, it also introduces greater short-term risk.
Market participants are expected to closely monitor price behavior in the coming sessions as the new rule stabilizes. The initial reaction—marked by index decline and selective stock surges—suggests a period of adjustment, where both retail and institutional investors recalibrate strategies in response to expanded volatility limits.
Your email address will not be published. Required fields are marked *
Comment *
Name *
Email *
Website
Save my name, email, and website in this browser for the next time I comment.
