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Nepal’s stock market erupted in optimism on Monday as investors reacted enthusiastically to the outcome of the House of Representatives (HoR) elections, pushing the Nepal Stock Exchange (NEPSE) to three successive circuit breakers and forcing trading to close within just one hour.

The surge came amid growing expectations of political stability, with the Rastriya Swatantra Party (RSP) heading towards a majority as vote counting nears completion. Market analysts and stockbrokers said the prospect of a stable government has lifted investor confidence, triggering aggressive buying across sectors.

The positive momentum had already begun building even before the elections. In the days leading up to the polls, the benchmark NEPSE index had climbed by around 58 points, reflecting investor anticipation of a decisive electoral mandate.

On Monday, the market opened at 2,712.49 points and quickly signalled a bullish start. During the pre-opening session alone, the index jumped by 44.63 points.

The rally intensified as soon as regular trading began. Within just one minute of the opening bell, the NEPSE index surged by 108.60 points - equivalent to 4 percent - triggering the first circuit breaker and halting trading briefly.

When trading resumed, the buying spree continued unabated. Within the next 20 minutes, the index had climbed a further 135.72 points, prompting the second circuit breaker and a 40-minute suspension of trading.

At 12:01 pm, the market reopened, but the euphoria proved unstoppable. The index immediately rose another 27.22 points, triggering the third circuit breaker of the day and forcing the exchange to suspend trading for the remainder of the session.

By the close, the NEPSE index had gained 162.93 points, or 6 percent, to settle at 2,875.43 points.

Despite the shortened session, investors traded 1,143,767 units of shares worth Rs 555.96 million.

The rally was broad-based, with all 13 sectoral indices ending in positive territory. The life insurance sub-index led the gains, surging by 610.32 points, while the heavyweight banking sector also rose significantly, adding 97.19 points. The sensitive index, which tracks the performance of ‘A’ class companies, climbed 28.11 points.

Out of the listed companies, 252 recorded gains in their share prices. Reliance Spinning Mills was the only company to post a decline during the session.

In terms of turnover, Narayani Development Bank led the market with shares worth Rs 31.36 million traded. Corporate Development Bank and Shiva Shree Hydropower emerged as the top gainers in intraday trading.

Market observers say the sharp rally reflects renewed investor optimism that the post-election political landscape could bring policy clarity and economic momentum in the months ahead.