NEPSE Ends Day Early After Steep 6% Drop and Repeated Suspensions, Sheds 160.33 Points to Close at 2,511.91

The Nepal Stock Exchange Limited (NEPSE) faced a turbulent session on Thursday as the benchmark index plummeted by 6%, triggering multiple trading halts before the market was forced to shut down for the remainder of the day.

Trading began with extreme volatility, lasting only three minutes before a 4% decline activated the first phase of NEPSE’s circuit breaker mechanism. This led to a 20-minute suspension, with trading resuming at 11:23 AM.

The relief proved short-lived. Within a minute of resumption, the index fell by 5%, prompting a 40-minute suspension under NEPSE’s rules. Trading restarted at 12:04 PM, but within just two minutes, the market hit the 6% lower circuit, automatically closing the exchange for the rest of the trading day.

By the time of the final closure, NEPSE had recorded a total turnover of Rs. 72.87 crore, with the benchmark index settling at 2,511.91 points, reflecting a loss of 160.33 points.

NEPSE follows a strict Index-based Circuit Breaker system to curb excessive volatility. A 4% fluctuation triggers a 20-minute halt, a 5% swing before 1:00 PM halts trading for 40 minutes, while a 6% movement in either direction results in an immediate closure for the entire day.

The triple application of circuit breakers on Thursday highlighted both the intensity of selling pressure in the market and the importance of regulatory safeguards to maintain stability during periods of severe fluctuation.