NEPSE Index Drops By 2.50%: Fiscal Year-End Pressure and Profit Booking Contribute to Market Downturn

The Nepal Stock Exchange (NEPSE) experienced a decline today, with the NEPSE index closing at 2,097.29 points after a loss of 53.70 points from the previous trading day. This represents a decline of 2.50%.

Last Wednesday, the index also suffered a loss of 35.37 points. One of the potential reasons behind the market downturn is the fiscal year-end pressure. As the end of the fiscal year approaches, investors and institutions often engage in portfolio adjustments and profit booking to align their investments with their financial goals and obligations. This phenomenon can introduce volatility and lead to selling pressure in the market, causing stock prices to decline.

Additionally, profit booking is another major factor that might have contributed to the market's downward movement. Profit booking refers to the practice of selling securities or stocks to realize the gains accumulated from price appreciation. When investors perceive that the market has reached a relatively high point or when they anticipate a potential decline, they may decide to lock in their profits by selling their holdings. This selling pressure can result in a downward trend in the market.

Note that market movements are influenced by a variety of factors, including economic indicators, geopolitical events, investor sentiment, and company-specific news. Therefore, fiscal year-end pressure and profit booking are potential reasons for the market decline, other factors may have also played a role in shaping the market's performance on this particular trading day.

Throughout the trading day, the NEPSE index displayed volatility. It opened at 2,154.8 points, reached an intraday high of 2,160.24 points, and dropped as low as 2,094.07 points before closing at 2,097.29 points.

In terms of trading volume, a total of 286 scrips were traded through 74,441 transactions. This resulted in 11,323,183 shares being exchanged, with a turnover amounting to Rs. 5.08 Arba. This is lower compared to the previous trading day's turnover of Rs. 5.97 Arba.

Himalayan Life Insurance Limited (HLI) emerged as the most actively traded stock, with a turnover of Rs. 42.56 crores and a closing market price of Rs. 549 per share.

On the positive side, BPW Laghubitta Bittiya Sanstha Limited (BPW) witnessed a gain of 10% and hit the positive circuit during the day, indicating positive market sentiment towards the stock.

However, Shrijanshil Laghubitta Bittiya Sanstha Limited (SHLB) faced a decline of 9.32% in its market price today.

Across all sectors, the market closed in the red. The "Microfinance" sector encountered the highest loss of 4.75%, while the "Mutual Fund" sector had the smallest decline of 0.78% for the day.