Bearish week wipes Rs50 billion off investor wealth as Nepse falls 31 points

The Nepal Stock Exchange (Nepse) experienced a bearish week from June 8-12, with the benchmark index falling 31.38 points, or 1.14 percent, to close at 2,724.03. This decline, driven by sustained selling pressure and reduced investor participation, wiped out Rs50 billion in market capitalization, bringing it down to Rs4.65 trillion from Rs4.70 trillion.

Trading activity mirrored the cautious sentiment, with weekly turnover decreasing by 14.36% to Rs23.07 billion. The average daily turnover also dropped to Rs4.61 billion from Rs5.39 billion, reflecting lower liquidity and market momentum. Most sectoral indices ended the week in negative territory, with the Trading sub-index seeing the steepest fall at 3.43%, followed by Finance (2.48%) and Life Insurance (1.65%). The Hotel and Tourism sub-index remained relatively stable.

Despite the overall downturn, some stocks attracted significant investor interest. Central Finance recorded the highest turnover at Rs1.11 billion, gaining 4.60%. Sopan Pharmaceuticals, a newly listed company, surged 92.30% to a 52-week high, and Appolo Hydropower rose 52.02%. Conversely, microfinance and development bank stocks faced heavy selling, with Upakar Laghubitta falling 9.63% and Corporate Development Bank declining 8.45%.

Market analysts believe the current consolidation could precede a market move, potentially influenced by the upcoming dividend season starting mid-July. They suggest that a strengthening economy, improved financial results from listed companies, and attractive dividends could drive the market higher.

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The market still has room to move higher, provided the economy strengthens, and listed companies deliver improved financial results and attractive dividends.