Kathmandu – The Nepal Stock Exchange (NEPSE) has experienced a historic decline based on points. As of today, Tuesday, the NEPSE index has dropped by 145 points, marking a historic low.

Previously, the highest drop in points in NEPSE was on September 5, 2021, when the index fell by 108 points. Today, the NEPSE index has dropped by a record number of points.

According to NEPSE spokesperson Murahari Parajuli, today’s decline is the highest in terms of points. He told Banking News, “Before this, the stock market had not fallen by this number of points. The previous highest drop was 108 points.”

With a drop of 145 points, the index has reached 2651 points. Additionally, today there has been record-breaking trading on NEPSE. Shares worth more than NPR 23.71 billion have been bought and sold today, surpassing the previous high trading amount of NPR 21.91 billion.

Why wasn’t the market halted despite a 5.18% drop?

Generally, if the stock market index drops by 4%, trading is halted for a certain period. However, despite a 5.18% drop today, trading was not halted. The main reason is that the index dropped by 5.18% only in the final moments.

During the first hour of trading, if the market fluctuates by 4%, trading is halted. In the second hour, if the market fluctuates by 5%, trading is halted. After that, the market needs to drop by 6% to halt trading. This is why trading was not stopped even with a 5.18% decline.

92-point decline in the banking sector

All 13 sectors experienced a decline today. No sector showed positive growth as the index fell sharply. The life insurance sector saw a decline of 870 points. Similarly, the non-life insurance sector fell by 686 points, and the hotel and tourism sector dropped by 624 points.

The production sector fell by 369 points, the development bank sector by 293 points, the trade sector by 226 points, the microfinance sector by 205 points, and the hydropower sector by 162 points. Additionally, the banking sector also experienced a decline of 92 points.

The main reason for the decline in the banking sector is the poor financial statements published on Monday. Among 20 commercial banks, 10 reported a decrease in profits. Four banks have reached a point where they cannot even distribute dividends to investors. Even the banks that can distribute dividends are unable to do so in significant amounts. This is why the banking sector has seen a 92-point decline, reaching 1455 points, which is a 5.96% drop.