NEPSE Index Falls Below 2,500 Points for the First Time in a Year

The Nepal Stock Exchange (NEPSE) index fell below the 2,500-point mark for the first time in a year on Thursday. The benchmark index dropped by 18.40 points to close at 2,487.17.

The market has been continuously declining for the past three trading days. NEPSE last traded below 2,500 points on September 29, 2024, when the index had closed at 2,464.40 points. On that day, the total transaction volume had exceeded Rs 4.05 billion, while Thursday’s trading amounted to more than Rs 3.27 billion. Both the index and daily transaction volume have been on a downward trend in recent days.

Muktinath Bikas Bank recorded the highest turnover on Thursday, with more than 350,000 shares traded worth over Rs 153 million. Amid the declining market, Himalayan Power Partner’s stock price rose the most—by 9.93 percent—while Samaj Laghubitta suffered the biggest drop of 10 percent. According to NEPSE, the share prices of 45 companies increased, 197 declined, and nine remained unchanged.

Senior investor Dambaru Ballabh Ghimire said the ongoing festive season has also affected investor participation. “There is no specific reason for the market to fall; investors are likely to return after Tihar,” he said. Ghimire added that as the dividend season has started, small investors are expected to trade based on companies’ dividend announcements, while the absence of large investors has also led to reduced trading volume. “The market’s next direction will depend on interest rate adjustments after mid-October and companies’ financial reports,” he added.

Investor and market analyst Ajit Khanal said Thursday’s session formed a “triple bottom” pattern. He noted that the index has established a support level at around 2,480 points. “If the market breaks below this level, negative sentiment could strengthen further,” Khanal observed.

Meanwhile, investor morale received a boost after Nepal Rastra Bank scrapped the Rs 250 million cap on margin lending against shares. The central bank implemented the recommendation made by the government-formed Capital Market Reform Task Force. The Securities Board of Nepal (SEBON) has also decided to implement around three dozen suggestions proposed by the task force and pledged to complete nine priority action points by mid-November.

However, implementation could face delays as SEBON employees remain on strike. Stakeholders have urged the Ministry of Finance to address the employees’ demands to ensure smooth functioning of the regulator.