KATHMANDU, SEPTEMBER 21

Nepal’s sole secondary market roared back to life on Sunday, erasing much of last week’s dramatic losses with a 111.70-point rally that lifted the benchmark Nepal Stock Exchange (NEPSE) index to 2,623.62-up 4.44 percent on the day.

The surge came on the first trading day of the week after Thursday’s turmoil, when a heavy sell-off triggered three successive circuit breakers and forced an early market closure. That collapse, which dragged the index down 6 percent to 2,511.91, was itself the first session after a week-long shutdown ordered in the wake of the September 8-9 Gen Z protests.

Broad gains across sectors

Sunday’s rebound was broad-based. The Sensitive Index, which tracks class-A stocks, climbed 4.37 percent, while the Float Index, measuring actively traded shares, gained 4.36 percent.

Every sector advanced except Non-life Insurance (–4.02 percent) and Mutual Funds (–0.71 percent).

Meanwhile, Trading stocks led the rally with an 8.66 percent jump, followed by Investment (7.68 percent), Development Bank (6.07 percent), Hydropower (5.83 percent), Life Insurance (5.66 percent), Finance (5.54 percent), Manufacturing & Processing (4.85 percent) and Banking (4.52 percent).

Similarly, the daily turnover reached Rs 9.17 billion as 20,032,224 shares of 329 companies changed hands in 108,908 transactions. Daily turnover had reached just Rs 728.7 million with 1,752,781 shares traded when the market closed early on Thursday.

Of the 252 traded scrips, 224 advanced and 28 declined. Nine stocks-Sindhu Bikash Bank, Bhugol Energy Development, Goodwill Finance, Shivam Cements, Joshi Hydropower, Api Power, Ankhu Khola Jalvidhyut, Balephi Hydropower and Himal Dolakha Hydropower-hit the upper circuit limit.

By the end of the trading day the total market capitalization stood at Rs 4.385 trillion.

Regulatory response and new calculation method

The Ministry of Finance reacted to Thursday’s volatility by forming a high-level task force to review market irregularities and recommend swift reforms to restore investor confidence on Friday. Joint Secretary and ministry spokesperson Tank Prasad Pandey said the panel has five days to submit its action plan.

In a separate move aimed at improving transparency, NEPSE announced that it will shift to using the final transaction price as the basis for index computation.

According to Murahari Parajuli, information officer at the NEPSE, the change was directed by the Securities Board of Nepal under the Securities Act 2063. It replaces the previous system, which calculated the closing price based on a weighted average of trades executed between 2:45 p.m. and 3:00 p.m. If no trade occurs in the closing session, the most recent trade price will determine the day’s close. Following a successful technical test, the new method will take effect from the next trading day after the public holiday on September 22.

Market watchers say the swift rebound, combined with the rule change and the government’s reform pledge, has given investors a measure of confidence after one of the most volatile weeks in recent NEPSE history.