Kathmandu-The stock market index NEPSE, which has been experiencing volatility in recent days, declined on Tuesday, the second trading day of the week.

The NEPSE index dropped by 9.24 points to close at 2,777.10 points compared to the previous trading day. In the previous session, the benchmark index had gained 27.85 points.

Trading activity also weakened alongside the index. A total of 11,868,405 shares of 342 companies were traded 52,692 times, generating a turnover of Rs 4.85 billion. In comparison, the previous trading session recorded a turnover of Rs 5.87 billion.

Among individual companies, Kalinchowk Hydropower Limited posted the highest gain of the day, rising by 9.23 percent. In terms of turnover, Aankhu Khola Hydropower Company Limited led the market with transactions worth Rs 477.2 million.

Sector-wise, all subgroup indices except mutual funds and non-life insurance ended in the red. The microfinance subgroup recorded the biggest decline, falling by 0.56 percent.

Although the market witnessed only a modest movement, investors seeking fresh momentum following the formation of the new government found some relief. However, overall market enthusiasm has yet to fully return.

Investor sentiment remains cautious ahead of the government’s announcement of the budget for the upcoming fiscal year later this week.

Market participants appear uncertain about their future investment strategies, as the government has yet to clarify the level of priority it will give to the stock market and what policy reforms may be introduced through the new budget.

Due to this pre-budget uncertainty, the market has struggled to make significant gains, with large and institutional investors continuing to adopt a wait-and-see approach. At present, market activity appears to be driven mainly by small and retail investors.

A vibrant capital market not only boosts investor confidence but also sends a positive signal to the broader economy by encouraging overall economic activity.