Nepal Stock Market Under Pressure: Key Reasons Behind NEPSE's Continued Decline

NEPSE Falls as Investor Confidence Remains Weak Despite Policy Reforms

Nepal’s stock market continues to face selling pressure despite a series of policy initiatives aimed at strengthening the capital market. The Nepal Stock Exchange (NEPSE) declined on September 28, 2026, as investor confidence remained subdued and market participation showed signs of caution.

Although the government and regulatory authorities have introduced measures intended to improve the investment environment, these initiatives have yet to translate into a sustained recovery in share prices. Weak investor sentiment, seasonal selling pressure, and uncertainty surrounding the movement of large investors remain important factors influencing the market.

The latest market performance highlights a key question for investors: why is NEPSE struggling to recover despite policy reforms, the beginning of the dividend season, and lower share prices across several listed companies?

NEPSE Market Summary: September 28, 2026

NEPSE Index

Bearish session

2,613.33

−16.47 points

(−0.63%)

Total turnover

Rs. 5.39 billion

Shares traded

13.18 million

Companies traded

357

Market breadth

50 ↑ / 223 ↓

Source: Beema Post, September 28, 2026. Figures rounded where applicable.

Beemapost

The NEPSE index closed at 2,613.33 points, down 16.47 points from the previous session. Shares of 357 companies were traded, with total turnover reaching approximately Rs. 5.39 billion.

Market breadth was strongly negative. Share prices of 223 companies declined, 50 advanced, and six remained unchanged. Twelve sectoral sub-indices closed lower, while the Trading group recorded a modest gain.

The broad-based decline indicates that selling pressure extended across much of the market rather than being limited to a small number of companies.

Beemapost

1. Government Policy Reforms Have Yet to Boost Market Demand

The Ministry of Finance has introduced a 21-point capital market relief and reform package as part of broader efforts to strengthen Nepal’s financial sector.

The measures have raised expectations among investors, particularly regarding capital gains tax, regulatory improvements, and the overall investment environment. However, policy announcements alone may not be sufficient to generate an immediate increase in stock market demand.

Investors generally look for tangible improvements in liquidity, market participation, confidence, and corporate performance before committing additional capital.

The gap between policy expectations and actual market performance remains one of the key challenges facing NEPSE.

2. NRB and SEBON Reforms Have Yet to Restore Investor Confidence

Nepal Rastra Bank (NRB) and the Securities Board of Nepal (SEBON) have taken initiatives relating to the regulatory environment and capital market development.

While regulatory flexibility and reform proposals may help remove certain barriers, their market impact depends on implementation, clarity, and investor response.

A recovery in investor confidence may require more than regulatory announcements. Consistent policy implementation, predictable rules, improved transparency, and stronger participation are also important considerations.

3. Dividend Season Has Not Generated the Expected Buying Interest

Nepal’s listed companies have started publishing their annual financial statements and announcing dividends for the previous fiscal year.

Dividend season often attracts investors looking for cash dividends, bonus shares, and companies with sustainable earnings. However, dividend announcements do not automatically lead to higher share prices.

Investors also consider dividend yield, earnings growth, distributable profits, valuation, and the company’s future financial position.

When market sentiment is weak, even companies announcing dividends may struggle to attract sufficient buying interest.

For investors, this makes it important to distinguish between an attractive dividend announcement and a financially sustainable dividend policy.

4. Falling Share Prices and Valuation Opportunities

The prolonged decline has brought the share prices of some listed companies to comparatively lower levels.

Some market participants believe these prices may present opportunities for long-term investors, particularly where the underlying businesses remain financially sound.

However, a lower share price does not necessarily mean that a stock is undervalued. Investors should examine earnings, book value, cash flow, debt levels, corporate governance, and future business prospects before making investment decisions.

A disciplined approach to fundamental analysis can help investors distinguish between companies trading at reasonable valuations and those facing persistent financial or operational challenges.

Learn more through Sarbaguna’s share market learning resources .

5. Uncertainty Surrounding Large Investors and Fund Sources

Questions and investigations concerning the sources of investment funds and possible money-laundering concerns have reportedly affected market sentiment.

According to market participants cited in the original report, uncertainty surrounding these issues may have made some large investors more cautious about deploying capital.

When large investors reduce their activity, smaller and medium-sized participants may not generate enough demand to offset selling pressure across the market.

However, the actual effect of these concerns on market liquidity and trading volumes would need to be assessed using transaction data and other verifiable evidence.

6. Dashain-Related Selling Pressure and Cash Management

The approach of Dashain may also be contributing to selling pressure in Nepal’s stock market.

Some investors may sell shares to arrange cash for festival-related expenses. Others may prefer to hold cash rather than commit fresh funds during a period of uncertainty.

If selling increases while new buying remains limited, share prices can come under additional pressure.

Seasonal cash requirements may therefore be one factor influencing market behaviour, although they should not be treated as the sole explanation for NEPSE’s decline.

7. Could NEPSE Face Further Downside?

The latest decline reflects continued weakness in market sentiment, but one negative trading session does not establish that a major market crash is inevitable.

The direction of NEPSE will depend on several factors, including:

• Whether buying demand improves at important technical support levels.

• Whether market turnover is supported by sustained buying or predominantly selling.

• Whether policy reforms translate into practical improvements.

• Whether large and institutional investors resume active participation.

• Whether listed companies deliver sustainable earnings and dividends.

• Whether domestic liquidity and investor confidence improve.

Investors can monitor support and resistance levels, market breadth, turnover, and sectoral performance to assess whether selling pressure is strengthening or beginning to ease.

For a structured approach, explore NEPSE technical analysis and support-resistance .

What Should Investors Consider in the Current Market?

During periods of uncertainty, investment decisions should be based on a combination of fundamental research, technical analysis, and risk management.

Long-term investors may focus on business quality, earnings sustainability, valuation, and financial strength. Short-term traders may pay closer attention to price action, trading volume, support and resistance, and predefined exit levels.

Investors should also avoid assuming that every market decline represents a buying opportunity or that every rebound signals a sustained recovery.

A well-defined investment plan can help reduce emotionally driven decisions during volatile market conditions.

Those looking to strengthen their analytical skills can explore stock market training in Nepal , covering fundamental analysis, technical analysis, and practical market interpretation.

Conclusion: Policy Reforms Need to Translate Into Market Confidence

Nepal’s stock market is facing a combination of weak investor sentiment, subdued buying interest, seasonal selling pressure, and uncertainty surrounding large investors.

Despite capital market reform initiatives, the NEPSE index has yet to establish a sustained recovery. The start of the dividend season and comparatively lower share prices have also failed to generate broad-based buying interest.

The September 28 session, in which NEPSE fell 16.47 points to close at 2,613.33, highlights the continuing weakness in market breadth.

Whether the market stabilises or experiences further declines will depend on future demand, liquidity, policy implementation, corporate performance, and investor confidence. A sustained recovery would require stronger participation and evidence that the underlying conditions supporting the market are improving.

Disclaimer: This article is for educational and informational purposes only. It is not a recommendation to buy, sell, or hold any security. Investors should conduct their own research and assess their risk tolerance before making investment decisions.

Frequently Asked Questions (FAQ)

Why is NEPSE falling in September 2026?

The reported reasons include weak investor confidence, limited buying interest, uncertainty affecting large investors, and seasonal selling pressure ahead of Dashain. Policy reforms have not yet generated a sustained improvement in demand.

What was the NEPSE index on September 28, 2026?

NEPSE closed at 2,613.33 points on September 28, 2026, declining by 16.47 points during the session.

Beemapost

Why has the dividend season not boosted the Nepal stock market?

Dividend announcements may attract investors, but buying decisions also depend on dividend yield, earnings quality, valuation, future growth, and overall market sentiment.

Does a falling share price mean a stock is undervalued?

No. A lower price alone does not establish that a stock is undervalued. Investors should examine financial performance, valuation ratios, cash flow, debt, and future prospects.

Could NEPSE decline further?

Further declines are possible, but they cannot be established from a single session. Investors should monitor market breadth, turnover, technical support levels, liquidity, and changes in investor demand.

Where can I learn stock market analysis in Nepal?

You can explore Sarbaguna’s stock market training courses  to learn fundamental analysis, technical analysis, and practical NEPSE analysis.

Sarbaguna – Nepal’s Stock Market Education and Analysis Platform

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