Investors Awaiting Monetary Policy Disappointed as NEPSE Continues Downward Trend

Kathmandu — Nepal’s stock market has failed to regain momentum even after the release of the latest monetary policy, leaving investors disappointed. Market participants who were expecting supportive measures from Nepal Rastra Bank to improve liquidity and boost confidence have instead witnessed continued selling pressure.

The decline in the share market, which began after the annual budget announcement, accelerated further after the monetary policy was unveiled. During the latest five trading sessions, the Nepal Stock Exchange (NEPSE) index declined on four days and gained only once, reflecting continued weakness in investor sentiment.

The NEPSE index had closed at 2,653.40 points at the end of the previous week. It started the new week under pressure, falling 26.29 points on Monday to close at 2,623.11 points. The market saw a temporary recovery on Tuesday, the day the monetary policy was announced, gaining 24.57 points as investors reacted positively in the short term.

However, the optimism did not last long. The index dropped 30.09 points on Wednesday and declined another 19.67 points on Thursday. On Friday, the final trading day of the week, NEPSE slipped by 1.13 points to close at 2,600.78 points.

Overall, the benchmark index lost 52.61 points during the week. The decline also reduced Nepal’s total stock market capitalization by Rs 90.41 billion. Market capitalization fell from Rs 45.59 trillion at the end of the previous week to Rs 44.68 trillion.

Despite the fall in the index, investor participation increased. Total share transactions during the week reached Rs 24.25 billion, with average daily turnover rising to around Rs 4.85 billion. Compared with the previous week, daily average turnover increased by more than 26 percent, indicating that trading activity remained strong even during market weakness.

The decline was broad-based, with all 13 sectoral groups listed on NEPSE closing lower during the week. The widespread fall indicates that the pressure was not limited to specific companies or industries but reflected overall uncertainty in the market.

Investors had placed significant expectations on the monetary policy, particularly regarding liquidity management, interest rate conditions, and measures to encourage investment. However, the policy failed to create the immediate confidence boost that market participants were hoping for.

Market analysts believe that investor psychology remains the biggest challenge at present. Although policy announcements can influence sentiment, investors often look for actual improvements in economic indicators before increasing their exposure to the market.

Meanwhile, the Securities Board of Nepal (SEBON) has started initiatives aimed at strengthening the capital market. The regulator is preparing a capital market development roadmap, reviewing existing securities regulations, and working on measures to improve transparency and protect investor interests.

The future movement of NEPSE will depend on how effectively monetary policy measures are implemented, the direction of interest rates, liquidity conditions in the banking system, and broader economic recovery.

For now, Nepal’s stock market remains in a cautious phase, with investors waiting for concrete economic signals rather than relying only on policy announcements.