Kathmandu, 17 Oct: On the first day of the Genz Movement (Bhadra 23), Nepal’s stock market index stood at 2,672.25 points, with a total market capitalization of Rs 4.467 trillion. By this Thursday, when the market closed, the index had dropped to 2,487.17 points, bringing the market capitalization down to Rs 4.157 trillion.
This shows that since the start of the Genz Movement, the share market has lost Rs 310 billion in total value.
Even in just the past week alone, the market lost about Rs 159 billion in capitalization. Last Thursday, the NEPSE index had stood at 2,582.18 points, representing Rs 4.316 trillion in market capitalization. Based on current figures, that marks a loss of Rs 159 billion in a single week.
Although a new government has been formed and election dates have already been announced — and even after the major festival season of Dashain — the market has continued to show a bearish trend, leaving investors uncertain and anxious.
Why Is the Share Market Falling?
A comparison of the three time periods shows that the market’s decline this week is even greater than that seen immediately after the Genz protests began. Analysts say investor confidence continues to drop. While both bullish and bearish trends are visible, the bearish influence has been stronger, pulling the market downward.
Experts note that although factors such as election focus, falling interest rates, and the dividend distribution season should have provided positive momentum, they have failed to boost the market significantly.
On the other hand, several negative pressures are at play. The economic damage from the Genz Movement, along with recent anarchic activities under the name of youth movements, has dampened business sentiment.
Although a non-partisan government has taken power, there is still no clear sense of political stability. The reactivation of ousted political parties and growing bipartisan tensions have raised doubts about the government’s focus on elections, leading to a lack of public confidence.
Sectoral Impact: Banking, Tourism, Hydropower, and Insurance
Listed companies have also shown weak performance. The banking sector, which holds the largest market share, is facing excess liquidity due to low loan demand amid political uncertainty, hurting profitability.
The hotel and tourism sector has stagnated due to the aftermath of the Genz Movement, while hydropower companies have suffered significant damage from floods and landslides during Dashain. Dozens of hydropower projects have been affected.
Meanwhile, insurance companies are struggling with rising claim demands — totaling about Rs 25 billion — due to both the protests and natural disasters, further weighing down the sector.
The first-quarter effect has also played a role, as banks and financial institutions typically mobilize resources to manage loan interest and installment payments during this period.
Additionally, internal disputes in key market institutions have contributed to instability. The Securities Board of Nepal (SEBON) has been unable to operate for 24 days due to employee protests, while Nepal Stock Exchange (NEPSE) staff have been working wearing black armbands in protest — both of which have indirectly impacted trading sentiment.
Experts Expect Market Recovery Soon
Tara Prasad Phullel, President of the Stock Market Investors Association, said that although there are no strong reasons for a major decline, the market has continued to fall. However, he expects it to rebound soon.
“The festival season and first quarter are over, and profit-booking pressure has eased. We believe the market will rise now,” Phullel said. “Both the Finance Ministry and regulatory agencies are currently market-friendly. The Finance Ministry has instructed the implementation of stock market reform recommendations, and the central bank has already acted on them. So, the outlook is positive.”
Technical Indicators Show Continued Bearish Trend
From a technical perspective, indicators still show a weak market. Most of the indices suggest a bearish pattern.
In the past 10 trading days, only one session produced a green candle, while all others formed red candles — a clear sign of a downward trend. However, the weaker lower shadows in recent candles indicate that buyers may be slowly re-entering the market.
The 21-day moving average remains above the 5-day average, signaling that the market is not merely correcting but in a bearish phase. Trading volumes have remained flat, further suggesting a continuation of the downward trend.
The Bollinger Bands have widened, reinforcing bearish momentum. The Relative Strength Index (RSI) currently stands at 33.43, indicating normal conditions but showing selling pressure in the market.
