The Nepal Stock Exchange (Nepse) index posted a sharp correction this week, falling 52.60 points, or 1.95 percent, to close at 2,649.51. It had ended the previous week at 2,702.11.

The Sensitive Index, which tracks blue-chip companies, also declined by 1.36 percent to 457.68.

Selling pressure was broad-based, with all 13 sectoral indices ending the week in negative territory. The Manufacturing and Processing sub-index recorded the steepest decline, dropping 3.31 percent, followed by Hydropower, which fell 2.80 percent, and the Others sub-index, down 2.43 percent.

The decline erased around Rs 80 billion in investor wealth over the five trading sessions. Total market capitalisation fell from Rs 4.61 trillion last week to Rs 4.53 trillion by the close of trading this week.

Despite the sharp fall in prices, trading activity remained largely unchanged. Total weekly turnover slipped marginally to Rs 20.01 billion from Rs 20.04 billion the previous week. Average daily turnover stood at Rs 4.002 billion, compared with Rs 4.008 billion a week earlier.

The steady turnover alongside falling prices suggests sustained selling pressure, with buyers willing to purchase shares only at lower valuations.

Among gainers, Yambaling Hydropower and Taksar Pikhuwa Hydropower defied the broader market, surging 101.07 percent each to close at Rs 603.20. Snow Rivers Limited also posted a strong gain of 15 percent to Rs 343.50.

Bungal Hydro Limited was the week's biggest loser, plunging 14.84 percent to Rs 662. Sopan Pharmaceuticals fell 12.55 percent to Rs 927.

Ankhu Khola Jalvidhyut Company was the week's most actively traded stock, recording a turnover of Rs 1.068 billion and trading volume of 2.88 million shares, despite its share price falling 3.90 percent. Sopan Pharmaceuticals recorded the second-highest turnover at Rs 959.5 million.

Chartered accountant and market analyst Manish Aryal attributed the market's decline to ongoing investigations into capital market-related cases.

“Investor confidence has weakened significantly, and as a result the market is not gaining momentum,” Aryal said. “There is scrutiny of brokers, and share transactions are carried out through brokerage companies. Investors are also in a fear zone.”

He said the implementation of the margin lending facility could support the market in the coming weeks. According to Aryal, 55 brokerage companies have already been authorised to provide margin loans, while the remaining firms are in the process of obtaining approval.

“As a result, at least Rs 1 trillion will be injected into the market, which will give momentum to the market,” he said.