The Nepal Stock Exchange (NEPSE) witnessed a dramatic trading day on Thursday, as the benchmark index plunged by 6%, triggering all three phases of the circuit breaker mechanism before the market was forced to close early.
Trading Timeline
Start of Session: Trading opened with heavy volatility, and within three minutes, the index dropped by 4%, activating the first circuit breaker and halting trading for 20 minutes.
11:23 AM: Trading resumed, but within a minute, the index slipped to a 5% loss, leading to a 40-minute suspension.
12:04 PM: The market reopened again, only to witness another sharp decline. Within two minutes, NEPSE hit the 6% lower circuit, which automatically closed the market for the rest of the day.
Market Performance
By the time trading was halted for the final time, NEPSE had:
Settled at 2,511.91 points, down 160.33 points from the previous close.
Recorded a total turnover of Rs. 72.87 crore.
Circuit Breaker Rules at NEPSE
NEPSE enforces a strict Index-based Circuit Breaker system to contain excessive volatility:
4% movement → 20-minute halt
5% movement before 1:00 PM → 40-minute halt
6% movement (either direction) → Full-day market closure
Significance
Thursday’s session marked a rare triple circuit breaker day, underlining the intense selling pressure faced by the market. It also highlighted the importance of regulatory mechanisms designed to protect investors and maintain stability during extreme market fluctuations.
