KATHMANDU
:The Nepal Stock Exchange (NEPSE) benchmark index fell 13.85 points on Thursday to close at 2,531.55, marking a second consecutive daily decline after Wednesday's 15.43-point drop. Turnover fell to around Rs 4 billion from Rs 4.2 billion the previous session, with 201 companies losing value against 69 gainers. The Manufacturing and Processing sector led the decline, falling 1.14 percent, while all ten other sector sub-indices also closed lower, by less than 1 percent each.
Why the market has been under pressure since the floodThe current slide follows a pattern analysts identified shortly after the August 26 Bhotekoshi disaster. In a market update earlier this month, Non-Life Insurance was named the worst-performing sector as investors weighed the likely cost of claims arising from the floods a concern reflected in the roughly Rs 25.9 billion in preliminary insurance claims Nepal's Insurance Authority had recorded by late August, as ICN has reported separately. Hydropower stocks were also flagged as a drag on the market, given the risk of physical damage to plants during the disaster 13 hydropower projects with a combined 759 megawatts of capacity were affected, according to the government's own reconstruction assessment as well as the separate, unrelated pressure of new shares entering the market as lock-in periods on recently listed hydropower companies expire.
One market analyst quoted in that earlier assessment noted that the index had shown signs of stabilising around the 2,500 level, and estimated that daily turnover would need to reach around Rs 8 billion to support a stronger, more sustained move higher — a bar this week's roughly Rs 4 billion sessions have fallen well short of.
A longer-running story, not just a flood reaction
The flood is compounding, rather than single-handedly causing, a market slide that predates the disaster by months. The NEPSE index stood above 2,950 points the day before Prime Minister Balendra Shah took office in late March; by mid-July it had fallen to roughly 2,570, even though investors had initially expected a new government to bring policy stability. Analysts cited in that period pointed to uncertainty over the government's capital gains tax changes in the budget, alongside ongoing investigations into stock-market-related activity, as factors keeping investors cautious well before the flood added a fresh, disaster-specific layer of concern.
What this means for readers with money in Nepal's market
For diaspora readers who hold NEPSE-listed shares, or who are considering investing remittance savings in Nepal's stock market, the current picture is one of a market under sustained, multi-cause pressure rather than a single, resolvable shock: political uncertainty, unresolved regulatory questions, and now flood-related sector-specific risk in insurance and hydropower are all cited by market analysts as live factors. Anyone considering new investment should treat sector-specific news particularly around insurance claims processing and hydropower reconstruction timelines as more informative than the daily index number alone.
