The Nepal Stock Exchange (Nepse) extended its decline during the trading week of June 8-12, as persistent selling pressure and weakening investor participation pushed the benchmark index lower and erased Rs50 billion in market value.

The benchmark Nepse index fell 31.38 points, or 1.14 percent, to close at 2,724.03 points, down from 2,755.41 points a week earlier.

Blue-chip stocks also came under pressure. The Sensitive Index, which tracks the performance of Class A companies, dropped 4.90 points, or 1.04 percent, to 467.09 points. The Float Index declined 1.98 points, or 1.05 percent, to 185.89 points.

The downturn significantly reduced investor wealth. Total market capitalisation fell from Rs4.70 trillion to Rs4.65 trillion over the week, wiping out Rs50 billion in paper wealth in just five trading sessions.

Trading activity also slowed sharply, signalling caution among investors.

Weekly turnover dropped 14.36 percent to Rs23.07 billion from Rs26.94 billion in the previous week. Average daily turnover declined to Rs4.61 billion from Rs5.39 billion, reflecting weaker liquidity and reduced market momentum.

Market analysts said the combination of falling prices and declining turnover could indicate that selling pressure is beginning to ease, potentially setting the stage for a reversal.

Most sectoral indices ended the week in negative territory. The Trading sub-index recorded the steepest decline, falling 3.43 percent, followed by the Finance sector, which dropped 2.48 percent, and the Life Insurance sector, which shed 1.65 percent.

The Hotel and Tourism sub-index was the most resilient, ending the week virtually unchanged with a marginal decline of 0.08 points.

Despite the broader sell-off, several stocks attracted strong investor interest.

Central Finance recorded the highest turnover of the week at Rs1.11 billion and gained 4.60 percent to close at Rs659. Ankhu Khola Jalvidhyut Company saw the highest trading volume, with 2.599 million shares changing hands, although its share price slipped 0.94 percent to Rs409.10.

Among gainers, newly listed Sopan Pharmaceuticals surged 92.30 percent to close at a 52-week high of Rs531.70. Appolo Hydropower was the second-best performer, rising 52.02 percent to Rs455.60.

On the losing side, microfinance and development bank stocks faced heavy selling. Upakar Laghubitta was the biggest loser, falling 9.63 percent to Rs2,910, while Corporate Development Bank declined 8.45 percent to Rs1,800.

Market analyst Jagannath Dhungel said the market appears to be consolidating ahead of its next major move, which could begin as the dividend season approaches.

“Listed companies start announcing dividends for this year from mid-July, and stocks typically begin reacting beforehand,” he said. “For now, the market still has room to move higher, provided the economy strengthens, and listed companies deliver improved financial results and attractive dividends.”

Chartered accountant and market analyst Manish Aryal said investor confidence has weakened following investigations into several high-profile stock market-related cases.

However, he remains optimistic about the market’s broader outlook, arguing that the benchmark index is unlikely to fall below the psychologically important 2,700-point level.

“Most policy measures are currently favourable to the market,” Aryal said. “Once there are clearer signs of economic improvement, the market will be in a position to move higher.”

Aryal also said the effective implementation of margin trading facilities by brokerage firms could provide additional momentum to the market.