Stock trading resumes after a 20-minute halt due to circuit breaker

Published On: June 29, 2020 01:54 PM NPT By: Republica  | @RepublicaNepal

Nepse index fell 4 percent amid panic sell-off of stocks

KATHMANDU, June 29: As stocks went into a freefall, Nepal Stock Exchange (Nepse) has imposed the first circuit breaker in the stock market.

Following a decline of Nepse benchmark index by 4 percent in 40 minutes of the trading, the circuit breaker was enforced. The enforcement of the circuit breaker suspends the trading for 20 minutes.

However, the trading has resumed after 20 minutes of trading break.

Circuit breaker refers to a regulatory measure to either halt or suspend the trading of stocks in the market when their prices swing massively. In addition to circuit breaker of particular stock, Nepse also imposed the index based circuit breaker. According to analysts, the circuit breaker is aimed at curbing trade for a certain time to allow investors to consider their trading decision carefully when there is volatility in the market.

However, the stock market that was falling from the first minute of the trading is recovering after the resumption of the trading. The benchmark index that had plunged to 1,153 points at 11:40 AM has now reached 1,180.36 points (at 13:46 AM).

The stock market has reopened today after one and a half months due to Covid-19 pandemic.

Nepse—the country’s sole stock market—was open only for two days in the last three months after the government imposed lockdown on March 24.  

Earlier on May 12, Nepse reopened the share market even though the lockdown was still in place. But the market was closed after two trading days, following the government’s instruction. The market saw a sharp decline in stock prices during the two days of trading.

While the government partially lifted the three-month lockdown on June 10, Nepse was not allowed to resume the trading of securities that was halted from May 13.

However, Sebon made a decision on Sunday to direct Nepse to resume the stock market from Monday following a massive pressure from investors.

The stock market is reopening as the economy is badly hit by the Covid-19 pandemic.


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