Nepal Stock Market Faces Volatility Amid Economic Uncertainty

The Nepal Stock Exchange (NEPSE) has been experiencing significant fluctuations, reflecting investor uncertainty over economic policies, taxation, and political stability.

In the past three months, NEPSE has dropped by 9%, with many investors selling their stocks due to fear of new capital gains taxes and rising inflation. The real estate, banking, and hydropower sectors have been particularly affected, with many companies reporting lower profits and investment slowdowns.

Stock market analyst Bikash Sharma says that investors are nervous due to a lack of clear policies from Nepal Rastra Bank and the Ministry of Finance. “The government must bring confidence back to the market by ensuring stable tax policies and supportive business measures,” he said.

Despite the short-term volatility, some experts believe that long-term investments in Nepal’s stock market remain promising, particularly in sectors like renewable energy, information technology, and financial services. However, the lack of institutional investors and low foreign participation continue to limit market growth.

As Nepal moves forward, economists suggest that stabilizing financial policies and encouraging local and foreign investment will be crucial in maintaining economic resilience.