Stock Market Drops 71 Points Following Formation of New Government
The stock market declined by 71 points to close at 2,879 NEPSE points on the first day after the new government was formed. Despite the market drop, the total transaction volume reached NPR 1.503 billion, higher than last Thursday’s figures. A brokerage firm director attributed the market decline to the impact of crackdowns and protests on investor sentiment. Kathmandu, 15 Chaitra.
Following the formation of the new government led by Balendra Shah, the stock market opened with a 71-point loss, pushing the NEPSE index below the 2,900 mark. The market consistently moved downward throughout the day, ultimately settling at 2,879 points. Despite the decline in index points, transaction volume increased compared to last Thursday’s NPR 1.316 billion, reaching NPR 1.503 billion today.
Among stocks, 9 companies saw price increases, 256 companies experienced declines, and 1 company’s price remained unchanged. All sectoral indices recorded losses, with the finance sector dropping the most by 3.38%. Likewise, banking declined by 2.78%, development banks by 2.89%, hotel and tourism by 2.25%, hydropower by 2.21%, investment by 2.98%, life insurance by 2.20%, manufacturing and processing by 1.07%, microfinance by 2.11%, non-life insurance by 2.23%, others by 2.52%, and trade by 3.01%.
Six companies posted price gains of 10%. These companies include Reliance Spinning Mills, Super Khudi Hydropower, Rizline Energy, Suryakund Hydroelectric, Bhujung Hydropower, and Hotel Forest. CYC Nepal Laghubitta’s shares rose by 7.1%, and Solu Hydropower increased by 3.5%. On the other hand, companies witnessing price declines include Unique Nepal Laghubitta (-6.17%), Himal Dolakha (-5.45%), Abhiyan Laghubitta (-5.39%), and Mountain Hydro Nepal (-5.37%).
Among the actively traded stocks today were Ridi Power, Ngadi Group, Solu Hydropower, Shivam Cement, and National Hydropower. What caused the market to decline? Many had anticipated renewed enthusiasm following the new government’s formation, especially after its pro-private sector decisions. However, a brokerage firm operator pointed to crackdowns and ongoing protests as the primary reasons for the negative investor sentiment. He stated, “There was no significant reason for the market to drop today after the government’s formation considering the previous days’ gains, but the crackdowns and protests have negatively influenced investor psychology.”
He further explained that the market had previously reached a high level with profits, but with the uptick in crackdowns and protests recently, there was increased selling pressure on Sunday. Last week, NEPSE had risen by 73 points. A month ago, the index stood at 2,673 points, and at today’s open on Sunday, it was at 2,950 points. “Some investors wait for the right time to sell their shares. The new government’s formation provided an opportunity for easier large-scale sales, which might have contributed to the increased selling,” he added.