NEPSE Trading Halted After Index Hits Three Circuit Breakers

In a sign of strong investor optimism following the House of Representatives elections, trading at the Nepal Stock Exchange (NEPSE) was halted for the rest of the day on Monday, March 9, after the benchmark index triggered three consecutive positive circuit breakers.

The stock market had remained closed for nearly a week due to the election holiday and other public holidays. 

As soon as the market opened, the NEPSE index surged by 4 percent within one minute. Trading was immediately suspended for 20 minutes.

When trading resumed, the index climbed by another 1 percent within a minute, triggering the second circuit breaker and a 40-minute suspension.

After the market reopened again, the index rose by a further 1 percent within a minute, taking the total gain to 6 percent. This triggered the third circuit breaker and halted trading for the rest of the day.

By the time the market closed, the NEPSE index had gained 162.93 points to reach 2,875.43.

According to NEPSE’s circuit-breaker rules, trading is suspended for 20 minutes if the index rises or falls by 4 percent within the first hour. If it moves by 5 percent within the second hour, trading is halted for 40 minutes. If the fluctuation reaches 6 percent within the third hour, trading is closed for the entire day.

Within just three minutes of trading, securities worth more than Rs 555.9 million were traded, involving more than 1.14 million shares.

Most listed companies posted gains. Of the traded companies, 252 advanced, while only one declined.

Reliance Spinning Mills Limited was the sole loser. Its share price fell by 1.49 percent to close at Rs 675.30 per share.

Corporate Development Bank Limited and Shiva Shree Hydropower Ltd led the gainers. Shares of both companies surged by 10 percent.

All the market indices closed in the green. The Sensitive Index rose by 6.03 percent. The Float Index gained 6.1 percent. The Sensitive Float Index increased by 6.26 percent.

All 13 sectoral indices also ended higher. The Trading Index recorded the largest gain, rising by 7.73 percent.

Narayani Development Bank Limited recorded the highest turnover. Shares worth more than Rs 31.3 million were traded. The bank’s share price rose by Rs 96.10 to close at Rs 1,522 per share.

The surge in the market comes as the Rastriya Swatantra Party (RSP) is set to form the next government.

The party has already won 123 first-past-the-post (FPTP) seats and is leading in two others. It is also far ahead in the proportional representation (PR) vote count, securing 4.07 million of the 8.42 million votes counted so far.

Nepal voted last Thursday to elect the 275-member House of Representatives, the lower chamber of the federal parliament. Of the total seats, 165 are elected through the FPTP system and 110 through proportional representation.

A party needs at least 138 seats to form a majority government. If the current trend continues, the RSP could secure at least184 seats, giving it a two-thirds majority.