NEPSE records sharpest drop since new government took office

The stock market continued its downward trend on Sunday, with the NEPSE index dropping sharply 105.50 points, or 3.79%, to close at 2,676.68. 

This marks the steepest decline since the new government led by Balendra Shah took office on March 27.

Investor sentiment has been weak since the government’s formation, with the market showing only two modest gains on March 31 and April 2. Total trading on Sunday reached NRs 12.38 billion, with 3.12 million shares exchanged.

On Sunday, all indices recorded red on Sunday. 261 listed companies saw their share prices fall, while only seven gained.

Negative circuit breakers were triggered for Narayani Development Bank, Himalayan Reinsurance, Bhugol Energy Development, Guardian Micro Life Insurance, Sapta Koshi Development Bank, Pure Energy, and Sanvi Energy. Positive circuits were observed in Reliance Spinning Mills, Bhujung Hydropower, Rizline Energy, Hotel Forest Inn, Super Khudi, and Suryakund Hydropower. Himalayan Reinsurance saw the highest turnover at NRs 582.8 million, followed by Shivam Cement (NRs 452.5 million) and Ngadi Group Power (NRs 426 million).

The market slump follows intensified surrounding detentions of businessmen on anti-money laundering issues, which recently led to the arrest of Deepak Bhatt, widely reported as a broker, and his high-profile business associates, including Shankar Agrawal and his son Sulabh from Shankar Group. Sulabh was arrested this morning. The investigation and arrests, including those of politicians, combined with rising oil prices and the government's seemingly widespread crackdown such as bulldozing in Pokhara Lakeside, have heightened investor anxiety and fueled the ongoing sell-off. 

Since the new government took office, the NEPSE index has lost a total of 274 points. Many on social media are calling the index’s decline a corrective move, citing its artificial inflation. Others believe investor anxiety is driven by such as frequent news of government crackdowns, which are seen as a precursor to uncertainty.