Nigerian equities down 0.08% on banking stocks losses while global stocks rally with DOW closing higher by 0.69%

The Nigerian equities market extended losses to the second consecutive session as the all-share index moderated 8bps to close at 36,641.52 points while year-to-date weakened to 36.3 percent. This is just as global stocks rally with the DOW index closing higher above 23,000 points.

Market capitalization equally declined by N9.7 billion to settle at N12.6 trillion on the back of losses in tier-1 banking stocks – ACCESS (-2.2%), UBA (-1.5%) and ZENITH (-0.5%).

Activity level softened as volume and value traded fell 6.0 percent and 0.4 percent to settle at 198.6 million units and N2.9 billion respectively.

Similar to previous trading session, sector indices’ performance was largely bearish with three sectors declining while two sectors closed flat.

The oil & gas index depreciated the most, down 0.4 percent owing to 3.0 percent loss in TOTAL. The insurance index followed, closing 0.3 percent lower due to losses in NEM (-2.9%) and LAWUNION (-4.9%) while the banking index lost 0.2 percent as a result of sell-offs in ACCESS (-2.2%), UBA (-1.5%) and ZENITH (-0.5%).

Relatedly, Guaranty Trust Bank, a leading tier-1 bank, submitted its Q3 results where gross earnings fell 5.9 percent year-on-year from N329.3 billion in corresponding period of 2016 to N309.9bn.

How the bank’ profit after tax rose 7.3 percent from N117.1 billion to N125.6 billion.

The consumer goods index was unchanged as appreciations in NIGERIAN BREWERIES (+0.3%) and DANGSUGA (+0.6%) were offset by depreciations in FLOURMILL (-2.7%) and NASCON (-4.7%). Similarly, the industrial goods index closed flat.

Market breadth weakened from 1.0x recorded on Tuesday to a negative close of 0.6x after 12 stocks advanced against 21 decliners. Best performing stocks were GLAXOSMITH (+5.0%), CUSTODYINS (+4.9%) and LEARNAFRCA (+3.9%), while NAHCO (-5.6%), LAWUNION (-4.9%) and CAVERTON (-4.8%) were the worst performers.

Despite consecutive negative closes, analysts envisage a rebound in market performance in subsequent sessions due to positive outlook on Q3:2017 earnings results.

In the global markets, stocks were seen rallying with the DOW index inching up 0.69 percent to close over 23,000 points for the first time. Nasdaq equally closed 0.01 percent higher to settle at 6,624.22 points while S&P closed 0.07 percent to settle at 2,561.26 points. Popular stocks that gained Wednesday include IBM gaining 8.86 percent.

Reacting to the rally, Trump’s treasury secretary told Politico that the stock market has “baked into it reasonably high expectations of us getting tax cuts and tax reform done.” He predicted the market will go “up higher” if Congress succeeds on taxes.