Nepal Stock Market extends decline, NEPSE falls 19.67 points to 2,601

KATHMANDU: Nepal’s stock market continued its downward trend on Thursday, with the Nepal Stock Exchange (NEPSE) index declining 19.67 points to close at 2,601 points.

The market, which had dropped by 30 points in the previous session, remained under selling pressure throughout most of Thursday’s trading. Investors remained cautious following the release of the latest monetary policy, with uncertainty surrounding share-backed lending provisions affecting market sentiment.

Along with the decline in the index, the overall trading volume also decreased. Total turnover stood at Rs 4.61 billion on Thursday, down from Rs 4.82 billion recorded in the previous trading session.

The market remained mostly in the red during the entire trading session. Of the total listed companies traded, share prices of 42 companies increased, while 229 companies declined and six remained unchanged.

All sectoral indices closed lower on Thursday, indicating broad-based selling pressure across the market.

The banking sector index declined by 0.50%, development banks by 1.11%, finance companies by 0.62%, hotels and tourism by 0.76%, hydropower by 0.70%, investment by 0.95%, life insurance by 0.61%, manufacturing and processing by 1.19%, microfinance by 0.69%, non-life insurance by 0.66%, others by 0.18%, and trading sector by 2.36%.

Among individual companies, Upakar Laghubitta Bittiya Sanstha recorded the highest gain, with its share price rising 12.68%. Snow Rivers also gained 11.76%.

Jan Utthan Laghubitta Bittiya Sanstha saw its share price increase by 3.09%, while Trishuli Hydropower Limited gained 2.77%.

On the losing side, Salapa Bikas Bank declined 8.28%, Three Star Hydropower dropped 7.92%, and Om Megashree Pharmaceuticals fell 5.76%.

In terms of turnover, debenture instruments recorded the highest transaction volume on Thursday. Reliance Spinning Mills, Asian Life Insurance institutional shares, Ankhu Khola Hydropower, Central Finance and Best Finance were among the companies with the highest trading amounts.

The decline came on the second trading day after the Nepal Rastra Bank (NRB) unveiled its monetary policy. The policy introduced a provision stating that the limit for share-backed loans would be determined based on the strength and financial position of individual institutions.

The new provision has created uncertainty among investors, as the market has been closely monitoring how banks and financial institutions will interpret and implement the changes.

Currently, banks and financial institutions provide margin lending of up to 70% of the lower value between the 180-day average share price and the current market price of a stock.

Market analysts said investors are taking a cautious approach amid uncertainty over possible changes in share-backed lending practices.

Meanwhile, the pressure related to the end of the fiscal year has also affected market sentiment. With banks focusing on loan recovery and borrowers preparing to repay instalments before the fiscal year-end, some investors have been selling shares to arrange liquidity.

Investors who sell shares by Friday can receive settlement amounts before the end of the fiscal year, allowing them to use the funds for repayment of loan principal and interest obligations. This factor has also contributed to increased selling pressure in the secondary market.