What is a circuit breaker in NEPSE?
A circuit breaker is a rule adopted by Nepal Stock Exchange to control unreasonable price fluctuation. If NEPSE index fluctuates 4 % within the first hour of regular trading i.e before 12 pm, trading will be suspended for 20 minutes. If Nepse fluctuates by 5 % within the second hour i.e 1 pm, trading is suspended for another 40 minutes as a second circuit. After that, if the market index fluctuates by 6 %, all transactions for the rest of the day will be suspended.
This halt gives market investors to analyze events, news, announcements, and take a necessary rational decision.
NEPSE has implemented an index-based circuit breaker from 21 Sep 2007. A circuit breaker is a market stabilizing tool used to check sudden rise/fall in the index. The circuit breaker rule was first introduced in the United States in 1987 when Dow Jones Industrial Average (DJIA) plummets 22% in a single day “The Black Monday.” Usually, index-based circuit breakers apply to three levels.
NEPSE Circuit Breaker Rule – NEPSE Halt Rule
Circuit for Individual Stock
There is another concept in Nepse trading, if the price of the individual company increase or decreases by 10% in a single day, it is called circuit-level trading. For example, the price of the ABC scrip can increase or decrease only by 10%. If it increases by 10% it is called a positive circuit and if the price decrease by 10%, it is called a negative circuit.
Note – The trading of stock will not be halted even after a positive or negative circuit like in the NEPSE index.
History of Circuit Break in NEPSE
| Date | Index | % Change | Turnover (crore) |
|---|---|---|---|
| SEP 18, 2025 | 2,511.91 | -6.00% | 72 |
| JUL 28, 2024 | 2,670.82 | 3.99% | 27 |
| MAR 4, 2024 | 2,078.00 | 6% | 37 |
| DEC 10, 2023 | 1,963.98 | 6 | 48 |
| DEC 14, 2021 | 2418.85 | 6.01 | 184 |
| JUL 19,2020 | 1479.03 | 6.04 | 6 |
| JUL 1,2020 | 1336.52 | 6.01 | 40 |
| JUNE 30,2020 | 1260.75 | 6.06 | 22 |
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