KATHMANDU: The Nepal Stock Exchange (NEPSE) recorded a significant decline of 31.49 points, signaling challenges in the market as financial institutions grapple with recovering from poor loan performance in the second quarter of the fiscal year.

The NEPSE index closed at 2098, indicating a negative trend.

The majority of commercial banks are struggling to rebound from poor loan performances, resulting in increased provision amounts and subsequent profit reductions. Meanwhile, many development banks have incurred losses, and some find themselves in the red.

NEPSE had been stagnating within a specific range, raising concerns that an improvement in bank values might lead to a market surge. However, the lack of improvement in the financial details of the banks has manifested in the NEPSE’s downturn.

Trading volume on this day has also decreased, with shares worth 6.36 billion rupees traded on Monday, compared to the high volume of seven billion rupees on Sunday.

In the hydropower company group, most companies have experienced a decline of up to 2.24%. This group, which had been consistently growing for some time, is now also facing a downturn.

However, some companies within this group have seen an increase of up to 10%. Upper Tamakoshi Hydropower’s share price has risen from 9.46 to 9.98% on this day.

Out of the 307 companies traded on this day, only 58 have seen an increase in their values, while 232 companies have seen a decline, and the rest remained stable.