KATHMANDU

The impact of political decisions on power change is seen in the stock market. Amid hopes of a positive atmosphere, a positive circuit has been applied in the stock market today.

After seeing signs of Finance Minister Bishnu Poudel’s arrival, many investors are excited. Even if Poudel does not come, once the minister who will make the stock market cool comes, investors become excited. Today the share market index increase by 117.70 and reached 2078.00 points.

Earlier, the market had closed after applying a positive circuit on Mangsir 24.

Today, after the market closed due to the application of a positive circuit, there is happiness in various broker houses. Some broker houses are distributing sweets, and some are dancing and singing.

The practice of circuit breakers in Nepal’s share market started in Ashoj 2064. Currently, if NEPSE increases by 4% in the first hour, trading is halted for 20 minutes; if it increases by 5% in 2 hours, trading is halted for 40 minutes; and if the market increases by 6%, trading is halted for the entire day. Today, the market has been closed for the entire day after circuit breakers were applied twice, and the market finally increased by 6%.

If we look at the history of ‘circuit breakers’, it is necessary to go to the American stock market. In the American stock market, on October 19, 1987, the first circuit breaker was applied to the Dow Jones Industrial Average. After a huge drop of 508 points, the first negative circuit breaker was applied in history.

In American history, on that day, there was a 22.6% drop in the Dow, meaning a drop of 508 points. On the first day the market opened, a ‘downfall’ occurred, and at that time, all the country’s investors were ‘paralyzed’. Today, that day is still considered ‘Black Monday’.

After that, in 2013, the rules of their circuit were revised, and three levels of circuits were determined.