NEPSE falls by 112 points: What’s behind the market decline?

Kathmandu, August 27 — On Tuesday, the NEPSE stock market index dropped by 112 points. The index, which started at 2899 points, fell to 2782.60 points before closing, experiencing typical market fluctuations throughout the day.

The stock market has been on a downward trend recently. The market closed at 3000 points on July 15.

However, by Sunday, August 18, the index had decreased by 34 points to 1966 points. In the following trading days, NEPSE showed some stability, but the market fell again by 80 points last Sunday and by 112 points on Tuesday.

Despite these declines, there has been no significant policy change to address the downturn. The government remains supportive of the stock market, and the National Bank has facilitated market activity by removing the cap on institutional share mortgage loans. There is ample liquidity in the banking sector.

Investor Chhotelal Rauniyar attributes the decline to a market 'correction' after a substantial 995-point increase without any decreases. According to Rauniyar, investors began booking profits during the uptrend, which contributed to the current drop. He views this correction as a normal market adjustment and believes it to be market-friendly.

Rauniyar also notes that psychological factors and rumors can impact market behavior. Despite the index drop, trading activity remains robust. On Tuesday, 4,386,000 shares of 330 companies were traded, totaling 18.65 billion rupees.

Rauniyar expects the market to recover and resume its upward trajectory soon, as there are no other fundamental reasons for the decline.