The Nepal Stock Exchange (NEPSE) witnessed a sharp correction on Monday as share prices of banks and financial institutions (BFIs) plummeted, leading to a significant drop in the sensitive index by 6.83 points.
This decline followed closely on the heels of a brief rebound on Sunday when blue-chip companies saw the index rise by 9.16 points, giving investors a glimmer of optimism. However, the trend reversed dramatically the next day, leaving market participants disappointed as 16 out of the top 20 losers were BFIs.
During Monday’s intraday trading, the development bank index recorded the steepest fall, plunging by 85.41 points. The microfinance index dropped by 63.41 points, followed by a 37.02-point fall in the banking sub-index, and the finance index declined by 28.74 points.
The sharp decline in BFI share prices highlights ongoing volatility in the financial sector amid investor concerns over slowing credit growth, rising non-performing loans, and liquidity management challenges, despite recent policy moves by Nepal Rastra Bank aimed at revitalizing the economy.
