Kathmandu: On Tuesday, the Nepal Stock Exchange (NEPSE) experienced a dramatic drop, plunging by a record 145.05 points. The daily turnover surged to a historic high of Rs 23.71 billion.
The NEPSE imposed a negative circuit breaker on the share prices of 11 companies during intraday trading. Seven of these companies, including Nepal Finance, Gurkhas Finance, Central Finance Co Ltd, Panchakanya Mai Hydropower, NRN Infrastructure and Development Limited, Shuvam Power Limited, and Hathway Investment Nepal Limited, saw their market values plummet by the maximum 10 percent.
This sharp decline contrasts with the recent bullish trend in the secondary market, which had seen the NEPSE index climb approximately 800 points following the formation of a new government and a more flexible monetary policy by the Nepal Rastra Bank.
According to stockbrokers, the drop on Tuesday was largely attributed to investors cashing in on recent gains. Additionally, the release of financial reports from banks and financial institutions, revealing a decrease in distributable profits, contributed to the market’s downturn.
The NEPSE index opened the day at 2,796.38 points but fell steadily throughout trading hours, closing at 2,651.32 points. The index hit a day’s low of 2,646.39 points just minutes before closing, before recovering slightly.
The sensitive index, which tracks the performance of ‘A’ class companies, also fell sharply by 27.22 points. The turnover for the day reached Rs 23.71 billion, an increase of Rs 1.85 billion from the previous day.
All 13 industry groups on the exchange reported losses. The life insurance index suffered the most, dropping 870.14 points, while eight other groups saw declines of over 100 points in their indices.
Among individual stocks, only eight companies reported gains, with Three Star Hydropower Limited being the top performer. In contrast, 233 companies recorded losses.
Meanwhile the global markets have also remained unsettled today. European stock markets remained volatile on Tuesday despite a rebound in Japan. The Nikkei 225 surged 10.23% after its earlier plunge, but European indices, including London’s FTSE 100, Paris, and Frankfurt, struggled to maintain gains and ended lower.
Global markets were impacted by fears of a U.S. economic slowdown, worsened by disappointing U.S. jobs data and concerns over overvalued tech stocks. The S&P 500 and Nasdaq both fell sharply. Experts are now focusing on the upcoming U.S. Federal Reserve meeting for potential interest rate cuts. Meanwhile, Japanese stocks rebounded following a rare interest rate hike.