The latest round of stock market rally, which started on May 3, had taken the index to 20-month high of 433.71 by Tuesday. [break]But after share prices of major banks like Standard Chartered, Nabil, Everest and Bank of Kathmandu fell owing to selling pressure, the benchmark index slumped to 419.77 points on Wednesday.
Data compiled by Nepse shows that stock price of Standard Chartered Bank fell by Rs 100 to Rs 2,100. Prices of Nabil Bank, Everest Bank and Bank of Kathmandu also dipped Rs 65, Rs 58 and Rs 33, respectively, pulling down the entire banking sub-index down by 4.68 percent.
Stock market analysts could not give clear cut reasons for the market slide of Wednesday. “It´s partly due to dampened political mood as CPN-UML´s decision to remain outside the government and doubts on timely promulgation of the constitution have eroded investor confidence,” they said.
Another reason is the technical problem encountered by the server of Nepse which handles order information, Niraj Giri, spokesperson of Securities Board of Nepal (Sebon), said.
The server malfunction at Nepse has been bugging stock brokers since Tuesday due to which many have not been able to log into the site of the stock market operator to place share orders.
“Since some brokers are being able to log in to the website and others are not, we have not been able to check the demand and supply situation on the market properly,” Anjan Poudel, president of Stock Broker Association, said. “This has affected brokers who want to sell shares and those who want to purchase shares as well.”
Because of this, Nepse had initiated a volatility halt in the market on Tuesday and suspended share trading for almost two hours. Although Nepse had pledged to fix the problem by the next trading day, it did not happen. As a result, the stock market operator could not clamp circuit breaker Wednesday after the stock market fell by three percent in the first trading hour of the day that continued from 12 noon to 1pm.
In the domestic market, circuit breakers are clamped when share index rises or falls by 3 percent, four percent and five percent. This is done to protect the market from negative effects of sudden upward or downward movement in share prices.
“But today (Wednesday) we were able to submit orders even when the circuit breaker was rolled out, which meant the server was not functioning properly,” Poudel said. “The problem in the server also affected many brokers as they could not log into Nepse´s portal to place orders.”
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