StockYanA circuit breaker is a safety mechanism used in the Nepal Stock Exchange (NEPSE) to temporarily stop trading when the market moves too sharply in a short period of time. The purpose of this rule is to control extreme volatility, reduce panic buying or selling, and give investors time to make rational decisions.
In NEPSE, circuit breakers are triggered based on the movement of the NEPSE Index compared to the previous day’s closing value. Since 21 April 2026 (Baishakh 7, 2082), there are two levels. If the index moves 5% up or down within the first two hours of trading (11:00 to 13:00), trading is halted for 15 minutes. If the index moves 8%, the market is closed for the rest of the day.
Apart from the index-based circuit breaker, individual stocks in NEPSE also have a daily price limit of ±15% (it was ±10% before 21 April 2026). This means a stock cannot rise or fall more than 15% from its previous closing price in a single trading day.
Circuit breakers help maintain market stability and investor confidence, especially during periods of high volatility or major news events. By pausing trading temporarily, the system prevents extreme price movements and allows the market to stabilize.