Nepal Stock Exchange (Nepse) index nosedived 67.92 points to close at a two year low of 1,220.44 points, with investors aggressively selling shares after the banks and financial institutions started making margin call amid the downfall of the shares’ prices.

The index has been undergoing a bearish trend for over two months now, losing 167 points in the past month alone. Market capitalisation has also plunged, from Rs1,622 billion to Rs1,429 billion. Over the period, single day trading amount also dropped to as low as Rs184 million, from an average turnover that once hovered at Rs1 billion daily.

Last week, the market failed to pick up any points, highlighting the bleak investor sentiment. The market that opened at 1,288.36 points on Sunday shed 9.4 points to close at 1,278.96 points. On Monday, the market was down 8.44 points and closed at 1,270.52 points.

The downturn in secondary market continued on Tuesday, Wednesday and Thursday with the index plunging 15.05 points, 24.4 points and 10.63 points respectively. On an average, the Nepse index declined 5.27 percent over the week.

Stockbrokers attributed the freefall to increasing pressure from the banks and financial institutions to fulfill the margin call on the loan that the investors had taken against the shares. “As the shares prices have plunged heavily in the recent days, the investors are witnessing the pressure” said a stockbroker under condition of anonymity. “This has led the investors to sell shares even at the low market price.”

The sensitive index that measures the performance of Group ‘A’ companies also decreased 13.97 points to close at 260.41 points with a fall in indices of most of the trading groups.

With a fall in the market index, the average value of shares listed on the stock market also went down Rs78.66 billion, with the market capitalisation reaching to Rs1,429.72 billion from Rs1,508.38 billion over the week.

Except for the sub-index of ‘trading’, the remaining trading sub-indices witnessed a loss. Insurance lost the largest of 562.29 points to close at 5,684.47 points. Hotels’ index dipped 168.01 points, followed by hydropower of 123.7 points and microfinance of 109.4 points.

Likewise, development banks was down with 60.59 points, commercial bank down 51.26 points, manufacturing down 42.5 points, finance companies down 20.32 points and ‘others’ dropping 20.01 points. The sub-index of ‘trading’ however gained 1.36 points.

Of the individual companies, Nepal Life Insurance Company led in terms of the transaction amount. The company witnessed a total transaction of Rs165.82 million.

Likewise, Nabil Bank with holding shares transaction worth Rs88.66 million was in second position, followed by Citizens Investment Trust, Nepal Bank Limited and Nepal Investment Bank. Nepal Credit and Commerce Bank led in terms of the traded number of shares. A total of 214,000 units of the bank’s shares were traded over the review period.

Last week, the stocks of 173 listed companies were traded. Despite a fall in the market index, the transaction amount rose 32.99 percent to Rs1.72 billion. According to Nepse, the traded number of shares also increased to 4,602,630 units from 3,339,160 units.