NEPSE Implements Circuit Breakers as Index Surges by 4%, Triggers Temporary Trading Halt For 20 Minutes

The Nepal Stock Exchange Limited (NEPSE), the benchmark index experienced a rapid surge of 4.01% or 82.48 points, reaching 2,135.87 points within a minute of the market opening today. This substantial increase prompted NEPSE to suspend its operations temporarily. The total turnover in NEPSE during this brief period amounted to 8.69 Crore. Now the market will resume at 11:21 AM.

NEPSE follows a system of Index-based Circuit Breakers to manage extreme market movements, with triggers set at 4%, 5%, and 6% in either direction. These circuit breakers are designed to induce trading halts across all equities, ensuring stability and preventing excessive volatility.

Specifically:

1. A 4% movement in either direction results in a 20-minute trading halt if it occurs during the first hour of trading (before 12:00 hours). However, if this movement occurs after 12:00 hours, there will be no trading halt, and the market will continue operations.

2. A 5% movement triggers a 40-minute trading halt if it takes place before 13:00 hours. If the movement occurs after 13:00 hours, there will be no trading halt at this level, and the market will resume trading.

3. A 6% movement, either way, leads to a complete trading halt for the remainder of the day.