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🇳🇵 Nepal /Economy & Trade

Nepal stocks shed $600 million in value amid broad market sell-off

From Kathmandu Post · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • The Nepal Stock Exchange (Nepse) saw a broad decline, with the benchmark index falling 1.98% and market capitalization dropping by Rs 90 billion in the week of July 6-10.
  • Despite falling prices, weekly turnover increased by 7.26%, indicating increased profit-taking and loss-cutting by investors.
  • Market analysts remain positive about the outlook, citing recent policy developments and subsiding seasonal pressures from quarterly loan payments.

The Nepal Stock Exchange (Nepse) experienced a significant downturn during the trading week of July 6 to 10. The benchmark index shed 52.62 points, closing at 2,600.78, a 1.98% decrease from the previous week's close of 2,653.40. This broad-based sell-off eroded investors' wealth by approximately Rs 90 billion, reducing the market capitalization to Rs 4.46 trillion from Rs 4.55 trillion.

The market outlook for the coming week remains positive.

— Manish AryalMarket analyst Manish Aryal expressed optimism about the Nepalese stock market's future performance.

Despite the overall decline in share values, market activity saw a notable increase. Weekly turnover rose by 7.26% to Rs 19.65 billion, up from Rs 18.32 billion the prior week. The average daily turnover also climbed to Rs 3.93 billion from Rs 3.66 billion. Market analysts interpret this surge in trading volume alongside falling prices as a sign of seller dominance, suggesting increased profit-taking and loss-cutting among investors.

All sectoral indices concluded the week in negative territory. The finance sector bore the brunt of the decline, plummeting 3% to 2,388.47. Manufacturing and processing, hydropower, hotel and tourism, trading, development banks, and microfinance sectors also recorded losses ranging from 2.01% to 2.81%. However, a few individual hydropower companies, including Kalanga Hydro, Sanigad Hydro, and Snow Rivers, defied the trend with significant gains.

Recent policy developments, including Prime Minister Balendra Shah's meeting with private sector representatives to address business concerns and the Securities Board of Nepal's plan to introduce a comprehensive capital market development roadmap, have improved investor sentiment.

— Manish AryalMarket analyst Manish Aryal cited specific policy actions as reasons for improved investor sentiment.

Market analysts, such as chartered accountant Manish Aryal, express optimism for the upcoming week. Aryal points to recent policy initiatives, including Prime Minister Balendra Shah's discussions with private sector representatives and the Securities Board of Nepal's plan for a capital market development roadmap, as factors boosting investor sentiment. He also noted that seasonal pressures from quarterly bank loan interest payments have largely subsided, alleviating a common reason for investors to sell shares.

Seasonal pressure from quarterly bank loan interest payments has largely subsided.

— Manish AryalMarket analyst Manish Aryal explained that a common seasonal pressure on the market has lessened.
DistantNews Editorial

Originally published by Kathmandu Post in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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