Nepal Stock Exchange (Nepse) index down-turned for the fifth straight week by whopping 51.89 points on Monday as aggressive selling gripped the investors.

With the market reeling under a strong selling pressure amid margin calls the indices extended losses by 4.25 cent on the day.

A free falling market forced Nepse to impose a circuit breaker, just an hour into the trading after stocks plunged by three percent in the first trading day of the week.

It was a black Monday at Nepse as all the trading groups, except finance, saw a steep downfall. The insurance sector was worst hit as it lost 383.92 points, followed by the hotels, micro finance companies, hydro powers and others.

Nepse index that opened at 1220.41 points on Monday closed at 1168.55 points.

Stock analysts point to multiple factors for the current situation. According to them, influx of shares, adjustments caused by de-materialisation and margin call on loans by banks and financial institutions have led to the downfall.

Some of the analysts define the bearish run in the past few weeks as market adjustment. “The investors are reeling under selling pressure and a supply adjustment amid margin call was inevitable,” said Prakash Tiwari, financial analyst at Hathway Nepal, an investment company.

Moreover, a faction of the analyst has credited the downfall to Finance Minister Yuba Raj Khatiwada’s comments which supposedly implied stock market as an unproductive sector.

The market started portraying bleak investor sentiment in the past three weeks amid ‘lack of lendable funds’. Moreover, the margin calls by banks have added up to the woes of the investors as they aggressively sold shares to fulfill the loan calls, a stock analyst informed.

Source: The Himalayan Times