Nigerian equities pare gains as U.S., pan-European markets record lows

Nigerian stocks traded lower Thursday after a 3-day rally in what analysts attributed to profit taking, especially in lag caps. Globally, most U.S and European stocks indices equally traded low.

The Nigerian equities market shed gains at the close of trade on the day as the All-Share Index (ASI) closed 0.08 percent lower to settle at 44,848.74 points, just as year-to-date (YTD) return contracted to 17.3 percent from 17.37 recorded previously.

Consequently, market capitalization dipped by N13.1 billion to close at N16.1 trillion.

The day’s performance was largely influenced by profit-taking in NIGERIAN BREWERIES (-2.8%), UBA (-2.7%) and UBN (-4.8%). However, activity level was mixed as volume traded advanced 40.0 percent to 1.3 billion units while value traded declined 14.3 percent to N10.7 billion.

Performance across sectors was mixed as three of five indices closed southwards. The industrial goods index was the biggest loser, down 1.2 percent primarily due to sell-offs in WAPCO (-3.7%).

The consumer goods index trailed, depreciating 1.1 percent as investors booked profit in NIGERIAN BREWERIES (-2.8%), UNILEVER (-4.3%), and DANGSUGAR (1.2%). Similarly, losses in FORTE (-0.4%) pulled the oil & gas index 0.1 percent lower.

On the flip side, buy an interest in MANSARD (+5.0%), NEM (+3.5%) and AIICO (+4.8%) buoyed the insurance index 2.0 percent higher while gains in GUARANTY (+2.0%) and ACCESS (+1.6%) drove the positive performance of the banking Index (+0.3%).

Investor sentiment measured by market breadth (advance/decline ratio) softened to 0.9x from 2.1x recorded the previous day consequent on 28 stocks advancing relative to 31 stocks that declined. The best performing stocks were CCNN (+10.2%), FCMB (+10.1%) and CAVERTON (+9.8%) while the worst performers were FIDSON (-9.2%), NASCON (-7.2%) and GLAXOSMITH (-5.0%).

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“As expected, investors booked profit on previous advancers, notwithstanding; we expect the market to close the week positive,” analysts at Afrinvest stated.

On the global scene, the London FTSE fell by 0.46 percent while the pan-European Stoxx 600 fell by 0.1 percent during afternoon deals, with sectors and major indexes pointing in different directions.

U.S. stocks also traded lower on the day as investors digested the sharp gains made in the previous session.

The Dow Jones industrial average fell 63 points after briefly declining 100 points. The S&P 500 traded 0.1 percent lower, with real estate as the worst-performing sector. The Nasdaq composite also declined 0.1 percent.

“I think this is bullish,” said Bruce Bittles, chief investment strategist at Baird. “It shows the optimism is there, but it’s not exuberant.”

The major indexes had posted record closes on Wednesday, shaking off a sharp intraday reversal in the previous session. The Dow closed above 26,000 for the first time, while the S&P 500 finished above 2,800 for the first time.

Stocks are off to a strong start this year. The Dow, S&P 500 and Nasdaq are all up at least 4.8 percent for 2018, adding to last year’s strong gains.