After rising for three consecutive trading sessions, the Nepal Stock Exchange (NEPSE) index declined sharply by 36.25 points on Wednesday to settle at 2,618.03. Total turnover stood at Rs. 6.356 billion during the session.

Investor Lalit Dhungana said weather-related concerns may have contributed to increased selling pressure in the market. According to him, concerns and rumors surrounding the weather forecast may have heightened investor anxiety and encouraged selling. He believes the impact may not persist for a long period.

The Meteorological Forecasting Division under the Department of Hydrology and Meteorology has warned of heavy to very heavy rainfall in various parts of the country from Ashoj 9 to Ashoj 12 due to a low-pressure system developed over the Bay of Bengal. Rainfall activity is expected to increase in Koshi, Bagmati and Gandaki provinces, with most parts of the country potentially experiencing moderate to heavy rainfall accompanied by thunderstorms, lightning and strong winds. Heavy snowfall is also possible in mountainous areas.

The authorities have urged the public to remain alert considering the potential risks of floods, landslides and snowfall. Investors have linked the weather-related concerns with the increased selling pressure observed in the secondary market.

Stock market analyst and investor Subash Chandra Dhungana said market fluctuations are a normal part of the secondary market. He noted that traders may sometimes respond to concerns surrounding potential events. Since the market can anticipate and react to possible future developments, he believes weather-related concerns may also have contributed to Wednesday's decline.

He expects the market could show some recovery after one or two trading sessions. Although the market has remained relatively slow this week, he said it could return to a more normal pace from next week.

Meanwhile, the government has introduced several policy measures aimed at supporting the stock market. It has published a 21-point action plan covering areas such as expansion of the primary and secondary markets, development of new financial instruments, growth of institutional investors, and improvements to brokers and market infrastructure.

The plan also prioritizes technology-based trading, stronger regulation and measures aimed at improving investor confidence. The government has stated that it aims to expand market access and liquidity while attracting private-sector and long-term investment.

The government has also reviewed the capital gains tax issue, which had remained a topic of discussion in the secondary market. The capital gains tax increase introduced through the budget was reviewed two months later following strong opposition from investors. The move was viewed as an effort to facilitate market activity and encourage greater participation.

Despite various government measures intended to support market activity, the secondary market has continued to face pressure. Recent fluctuations have left many investors uncertain about the market's near-term direction.