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Nepal’s stock market suffered a sharp correction on Wednesday as the benchmark NEPSE Index fell 46.78 points, slipping back below the 2,800 psychological level amid a steep decline in trading activity and broad-based losses across most sectors.

The index closed at 2,796 points, extending losses for the second consecutive session after Monday’s rally. Market data show that the index had reached 2,875 points earlier in the week after triggering a positive circuit breaker, but the market has since lost 79 points over the last two trading days.

Broad-Based Selling Dominates Market

Market sentiment remained weak throughout Wednesday’s session. Although the market showed early volatility during the first hour of trading, the index steadily declined for the remainder of the session as selling pressure intensified.

Out of the companies traded on the Nepal Stock Exchange:

34 companies recorded price gains

225 companies declined

3 companies remained unchanged

The overwhelming number of declining stocks reflects a market-wide correction, particularly after the rapid rally earlier this week.

Trading Volume Shrinks by 38%

Trading activity also dropped sharply, signaling weakening investor participation and cautious sentiment.

Total daily turnover fell 38 percent compared to the previous session. The market recorded Rs 13.18 billion in transactions, down from Rs 21.50 billion a day earlier.

The sharp contraction in liquidity suggests investors are taking a wait-and-see approach following recent market volatility and policy discussions surrounding possible reforms in trading mechanisms.

Sectoral Indices Mostly in Red

Nearly all sectoral indices ended the session in negative territory.

The Trading sector recorded the biggest decline, falling 3.4 percent. Other sectoral losses included:

Banking: down 1.82 percent

Development Banks: down 1.61 percent

Finance: down 2.08 percent

Hotels and Tourism: down 1.56 percent

Hydropower: down 0.71 percent

Investment: down 1.87 percent

Life Insurance: down 1.98 percent

Manufacturing and Processing: down 1.43 percent

Microfinance: down 1.64 percent

Non-Life Insurance: down 0.97 percent

Others: down 1.83 percent

The widespread decline across sectors indicates that the correction was not confined to a specific industry but rather reflected broader market pressure.

Top Gainers and Losers

Despite the overall downturn, a handful of stocks recorded strong gains.

Shares of Salpa Bikash Bank and National Hydropower Company surged by 10 percent, hitting the upper trading limit for the day.

Other notable gainers included:

Reliance Spinning Mills - up 9.33 percent

Ridi Power Company - up 5.72 percent

On the losing side, Kalika Power Company recorded the steepest decline, falling 8.47 percent.

Other major losers included:

Panchakanya Mai Hydropower - down 5.77 percent

Three Star Hydropower - down 5.37 percent

Trade Tower Limited - down 4.47 percent

Most Actively Traded Stocks

The session’s highest turnover stocks included:

Ridi Power Company

Aankhu Khola Hydropower

National Hydropower Company

API Power Company

Ngadi Group Power

Market analysts say the correction highlights the fragile sentiment in Nepal’s equity market, where investor reactions to political developments, regulatory discussions, and short-term speculation often drive rapid swings in the benchmark index.