The Nepal Stock Exchange (NEPSE) Index dropped 1.27%, or 35.09 points, to close at 2,725.71 on Monday, July 14, reversing the previous day's 1.06% gain.

Investor enthusiasm, particularly in the microfinance and banking sectors on Sunday—the first trading day after the monetary policy announcement for fiscal year 2025/26—faded quickly as trading volume declined sharply on the second trading day of the week.

NEPSE had climbed 0.95% last Thursday and 0.82% on Wednesday, following four consecutive days of losses.

Expectations of a sustained rally, driven by the new governor's market-friendly stance, gave way to caution on Monday. Trading volume shrank to around 21.1 million shares across 72,601 transactions, compared to over 32.59 million shares across 105,415 transactions the previous day. Daily turnover dropped to just above Rs 8.17 billion from Rs 11.41 billion on Sunday.

Of the 248 listed companies traded on the day, 198 declined while 50 advanced.

All major indices ended in negative territory. The Sensitive Index fell 1.42%, the Float Index dropped 1.40%, and the Sensitive Float Index declined 1.53%.

Mai Khola Hydropower Ltd. (MKHL) was the top gainer, rising 5.90%. The biggest loser was Samudayik Laghubitta Bittiya Sanstha Ltd. (SLBSL), which fell 4.46%.

NRN Infrastructure and Development Ltd. (NRN) led in turnover with Rs 408.85 million, followed by Butwal Power Company Ltd. (BPCL) with Rs 394.59 million, and Sanima Bank Ltd. (SANIMA) with Rs 247.50 million.

Twelve of the 13 sectoral indices ended in the red. The Hydropower Index, which had posted the sharpest loss on Sunday, was the only gainer, inching up 0.15%.

The Banking Sub-Index recorded the steepest decline, falling 2.46% and reversing Sunday’s 3.37% gain.

Market capitalisation fell to Rs 4,541.89 billion from Rs 4,600.37 billion on Sunday.