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Nepal Stock Exchange (NEPSE) has ended the Fiscal Year (FY) 2025/26 with a decline of 7.05 percent in its index on the last trading day.

Overall, NEPSE shed 196.98 points in a year. The index, which closed at 2,794.78 points on the last trading day of FY 2024/25, fell to 2,597.80 points on Thursday, the last trading day of FY 2025/26.

In one year, investors lost Rs 327 billion. During the review year, the market capitalization fell to Rs 4.463 trillion from Rs 4.790 trillion.

Along with the NEPSE index, most of the market value of subgroups has also declined. The highest fall was observed in the trading group, a decline of 20.41 percent.

Similarly, the index of ‘other’ category decreased by 19.32 percent, investment group by 16.12 percent, non-life insurance by 15.09 percent, microfinance by 11.48 percent, life insurance by 10.08 percent, development bank by 6.22 percent, finance by 6.02 percent, banking by 5.96 percent and hydropower group by 3 percent.

On the other hand, three subgroups remained in the green. The hotel and tourism group increased by 1.80 percent, the mutual fund by 7.60 percent, and the manufacturing and processing group by 37.93 percent.

In the early days of FY 2025/26, the market transaction was encouraging with the NEPSE posting volume as high as Rs 21.46 billion on July 20, while the index rose to four-year high at 3,002 points on July 29.

The volatility in the share transactions appeared two weeks after the Gen Z protest, when the volume dropped to a mere Rs 728.70 million on September 18. The market index subsequently fell to as low as 2,487 in mid-October.

The market bounced back after the general elections on March 5. As a result, the daily turnover soared to Rs 23.59 billion on March 22. However, the market failed to retain its charm for investors after the government launched a crackdown against money laundering cases.

After the success of the March 5 election, the stock market recorded the lowest daily turnover at Rs 555.96 million on March 9 with the authority imposing single-day circuit breakers. Subsequently, NEPSE revised the rules of circuit breakers after which the secondary market posted daily turnover as low as Rs 2.45 billion.

The sector’s analysts said the share market was adversely affected due to eroded investors’ confidence despite banks reducing interest rates amid excess liquidity with them.