The stock market fell sharply on Wednesday, with hydropower and non-life insurance companies bearing the brunt of selling after a major flood hit Rasuwa in the morning.

The Nepal Stock Exchange (NEPSE) index dropped 35.92 points from Tuesday to close at 2,558.35 points.

Of the 13 sub-indices that traded on Wednesday, the hydropower index fell 2.84 percent, while the non-life insurance index posted the steepest decline, dropping 3.90 percent.

The sharp fall in hydropower shares was attributed to preliminary reports of extensive damage to several hydropower projects in and around Rasuwa. Companies with projects in the Rasuwa area were among those whose share prices declined significantly.

Non-life insurers also faced heavy selling as they provide insurance coverage for hydropower projects. Brokers said reports of damage to insured projects raised concerns over potential insurance payouts, which could affect insurers’ profits.

The life insurance sub-index also recorded a significant decline. All 13 sub-indices that traded on Wednesday closed lower.

Of the 278 companies traded, 252 saw their share prices fall, while 23 gained and three remained unchanged.

A total of 135,823,320 shares changed hands through 61,442 transactions, with turnover reaching Rs4.77 billion. The turnover was higher than on Tuesday.