Nepal Stock Market plungs 105 points amid broad-based selloff; 7 companies hit lower circuit

KATHMANDU: Nepal’s stock market witnessed a sharp downturn on Sunday, with the benchmark index falling heavily amid widespread selling pressure across almost all major sectors.

The NEPSE Index declined by 105.50 points, or 3.79 percent, to settle at 2,676 points. The fall comes just days after a brief rebound of 5.82 points in the previous trading session.

Market analysts note that since the formation of the new government, the index has fallen by a cumulative 284 points, down from a recent high of 2,960 points. Market sentiment, they say, has turned cautious amid growing uncertainty in the broader business environment.

Investor Sentiment Weakens Amid Policy and Market Concerns

According to former chairman of the Stock Brokers Association of Nepal, Narendra Singh Sijapati, recent developments involving increased regulatory pressure on major business houses have contributed to investor anxiety.

“When large business groups face pressure, the market reacts with fear because they hold a significant portion of listed shares,” he said, adding that the current correction, while sharp, may not necessarily reflect a long-term structural crisis.

Turnover Rises Despite Sharp Decline

Interestingly, despite the steep fall in prices, market turnover increased significantly. Total trading volume rose to NPR 12.38 billion, up from NPR 8.81 billion in the previous session, indicating heightened activity and possible panic selling.

Out of the total listed stocks, only 7 companies gained value, while 261 declined, highlighting the breadth of the selloff.

Sector-Wide Pressure Across the Market

Almost all major sectoral indices closed in negative territory. The banking sector fell 3.32 percent, development banks 4.32 percent, finance 3.94 percent, hotels and tourism 3.04 percent, hydropower 4.84 percent, investment 3.32 percent, life insurance 3.59 percent, manufacturing 1.33 percent, microfinance 3.43 percent, non-life insurance 3.86 percent, and trading 3.58 percent.

The only exception was the “Others” group, which rose 6.09 percent, largely driven by gains in reinsurance companies such as Nepal Reinsurance Company and Himalayan Reinsurance Company.

Upper Circuit and Lower Circuit Movements

Despite the overall decline, six newly listed companies hit the upper circuit limit of 10 percent gain. These included Reliance Spinning Mills, Super Khudi Hydropower, Ridgeline Energy, Suryakund Hydroelectric, Bhujung Hydropower, and Hotel Forest Inn.

On the other hand, seven companies hit the lower circuit of 10 percent decline, including Narayani Development Bank, Himalayan Reinsurance, Bhugol Energy, Guardian Micro Life Insurance, Saptakoshi Development Bank, Pure Energy, and Sanvi Energy. Nepal Reinsurance also fell sharply by 9.62 percent.

Active Stocks and Market Drivers

The most actively traded stocks of the day included Himalayan Reinsurance, Shivam Cement, Ngadi Group Power, National Hydro Power, and NRNA Infrastructure.

Market participants say the current volatility reflects a combination of policy uncertainty, sector-specific pressure, and shifting investor sentiment, with short-term traders driving much of the volume.

While the market correction has intensified, analysts emphasize that long-term stability will depend on policy clarity, corporate governance confidence, and overall macroeconomic recovery.