Losses in banking stocks drag Nigerian equities market down 0.31% as global stocks slide

The Nigerian equities market closed trading Monday negative as local bourse index lost 31 basis points or 0.31 percent to close at 37,250.78 points. The below par performance reverberated globally with global stocks sliding Monday as investors looked ahead to a possible U.S. Senate vote on proposed tax changes and data announcements from major economies.

To this end, the Nigerian market year-to-date gain moderated to 38.6 percent just as market capitalisation lost N36.1 billion to settle at N12.9 trillion.

The day’s negative performance could be largely attributable to losses in banking stocks- STANBIC (-4.7%), ZENITH (-1.0%), ETI (-3.0%) and ACCESS (-0.6%).

However, activity level was mixed as volume traded inched 8.3 percent higher to settle at 942.7 million units while value dipped 5.2 percent to close at N4.8 billion.

Sector performance was mixed as three of five indices closed in the green, one trended southwards and the other flat.

The banking index emerged the lone loser, down 0.6 percent owing to price depreciation in ETI (-3.0%), ZENITH (-1.0%) and ACCESS (-0.6%). On the flip side, the consumer goods index led gainers, up 0.3 percent due to upticks in NIGERIAN BREWERIES (+0.9%), DANGSUGAR (+3.3%) and PZ (+3.4%).

The insurance index trailed, up 0.2 percent on account of gains in CONTINSURE (+2.9%) and LAWUNION (+4.9%). Similarly, buying interest in FORTE OIL (+2.5%) pushed the oil & gas index 0.1 percent higher. The industrial goods index closed the day flat.

Investor sentiment as measured by market breadth (advancers/decliners ratio) softened to 0.8x from 1.4x recorded the previous session as 18 stocks advanced against 34 decliners.

The top performing stocks were LAWUNION (+4.9%), NAHCO (+4.9%) and DANGFLOUR (+4.0%), while the worst performers were AIRSERVICE (-4.9%), PORTPAINT (-4.8%) and UPL (-4.7%).

“Following the negative market performance today, we expect bargain hunting – especially in banking stocks – to buoy market performance in subsequent trading sessions,” analysts at Afrinvest noted.

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On the global stage, stock prices slid Monday as investors looked ahead to a possible U.S. Senate vote on proposed tax changes and data announcements from major economies.

In early trading, France’s CAC 40 lost 0.4 percent to 5,369.20 and Germany’s DAX declined 0.3 percent to 13,016.58. London’s FTSE 100 shed 0.1 percent to 7,398.74.

The Shanghai Composite Index fell 0.9 percent to 3,322.23 and Tokyo’s Nikkei 225 lost 0.2 percent to 22,495.99. Seoul’s Kospi plunged 1.4 percent to 2,507.81 and Hong Kong’s Hang Seng shed 0.6 percent to 29,691.01. India’s Sensex lost 0.2 percent to 33,604.68 and Sydney’s S&P-ASX 200 edged up 0.1 percent to 5,988.80. New Zealand gained while benchmarks in Taiwan and Southeast Asia retreated

However, U.S. stocks set more records following the Thanksgiving Day break as technology companies did much of the heavy lifting. Energy companies rose with the price of oil. Macy’s and other retailers rose after the department store’s CEO said Black Friday sales were going well.

The Standard & Poor’s 500 Index rose 0.2 percent to 2,602.42, its first close above 2,600. The Dow Jones industrial average added 0.1 percent to 23,557.99. The Nasdaq composite gained 0.3 percent to 6,889.16.

“There was little Thanksgiving calm last week, as markets were swayed by both political worries over difficulties in forming a German government, and a set of FOMC minutes that betrayed increased caution over U.S. inflation profiles,” said Mizuho Bank in a report. “Besides German politics, the dominant focus for markets will be on U.S. tax reforms.”