Stock market down 42.46 points as bear run continuesThe Nepal Stock Exchange (Nepse) index plunged 42.46 points on Wednesday as investors rushed to sell shares following rumours about a bear run at the bourse.
The Nepal Stock Exchange (Nepse) index plunged 42.46 points on Wednesday as investors rushed to sell shares following rumours about a bear run at the bourse.
The selling pressure brought the index down to a five-and-a-half-month low of 1,540.01 points. The last time the Nepse had dropped to this level was on June 8.
The bear run has wiped out Rs129.44 billion in market capitalisation which fell to Rs1,713.2 billion. The stock market has been witnessing selling pressure from the beginning of the week.
The Nepse index plunged 58.46 points on Sunday, the biggest one-day fall since August 9. Stocks started tumbling soon after trading opened at 11 am. By 12:37 pm, the Nepse was down 4 percent.
The bourse then halted trading for 30 minutes till 1:07 pm. The circuit breaker helped the market recoup some of the losses, and the index closed at 1,599.62 points.
Although share prices bounced back on Monday pushing the Nepse up 6.67 points, the index lost 23.82 on Tuesday. In total, the Nepse index has lost 118.07 points since the beginning of the week.
During the day, almost all sub-indices ended in the red. The insurance sector was the biggest loser, shedding 365.64 points. Another big loser was the hotels sector, which lost 102.92 points, followed by development banks, which ended the day 41.8 points lower.
Commercial banks too lost 37.47 points, while the hydropower, others, finance and manufacturing sectors fell by double digits.
Prahlad Kumar Oli, managing director of Pragyan Securities, blamed rumours of the market going bearish for the latest downturn at the bourse.
“After the Indian government pulled IRs500 and IRs1,000 notes out of circulation, many investors have started fearing that demand for shares will remain low,” said Oli. “As a result, many small investors, who do not have big risk appetite, have started offloading their holdings.”
However, Oli refused to believe that the Indian currency ban had adversely affected the stock market. “As the law does not allow Nepalis to hold more than IRs25,000 worth of IRs500 and IRs1,000 bills, the chances of the Indian government’s decision hitting the Nepali stock market are low,” he said.
Nepse witnessed transactions of 1.5 million shares worth Rs1.07 billion on Wednesday.