Nepal Stock Market Falls Sharply as Rasuwa Floods Hit Hydropower Sector

Nepal's stock market registered a sharp decline on Wednesday, with the benchmark NEPSE index falling by 35.92 points to settle at 2,558. The downturn was significantly influenced by damage to hydropower projects in the Rasuwa district and surrounding areas caused by recent floods originating from the Tibetan side.

The hydropower sub-index bore the brunt of the market's fall, dropping by 2.84%. This sector's vulnerability was highlighted as floods impacted over a dozen operational and under-construction hydropower projects in Rasuwa and neighboring regions. The preliminary assessment by the Nepal Electricity Authority indicates that the total capacity of affected projects amounts to 748 MW. Consequently, shares of several flood-affected hydropower companies experienced substantial losses, including Rasuwagadhi Hydropower (-15%), Mailung Khola Hydropower (-14.99%), and Trishuli Hydropower (-12.95%).

Adding to the market's woes, the non-life insurance sub-index also saw a considerable drop of 3.90%. Investors reacted nervously to the potential insurance liabilities stemming from the extensive damage to hydropower infrastructure. Other sectors, including banking, development banks, finance, hotels and tourism, investment, life insurance, manufacturing and processing, microfinance, others, and trading, also closed lower, reflecting a broad-based market sell-off. Despite the overall decline, a few companies like Sarbottam Paints saw gains.

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The total capacity of affected operational and under-construction projects at 748 MW.