Nigerian stocks extend gains by 0.55% as Dow jumps 70 points on strong U.S economic data

The Nigerian equities market Wednesday extended gains from the previous session as benchmark index jumped 0.55 percent to close at 37,709.20 points. This is just as Wall Street bet on strong U.S economic data, which drove the Dow up 70 points.

The local market performance expanded year-to-date gain to 40.3 percent, while market capitalization gained N71.6 billion to settle at N13.1 trillion.

The major drivers of the day’s performance were NESTLE (+1.9%), GUARANTY (+1.2%) and ETI (+3.2%). However, activity level softened as volume and value traded fell 59.9 percent and 14.9 percent to settle at 441.8 million units and N4.1 billion respectively.

Sector performance was largely positive as all indices trended northwards, save the industrial goods index, which declined 0.7 percent due to losses in WAPCO (-2.0%) that recently opened its Rights Issue at a subscription price of N42.50/share, 13.3 percent discount to current share price (N49.00/share).

The insurance index emerged the top gainer, up 1.4 percent owing to upticks in MANSARD (+4.9%) and CUSTODYIN (+0.8%).

The banking index trailed, rising 1.1 percent on account of sustained buying interest in GUARANTY (+1.2%), ETI (+3.2%) and FIDELITY (+9.9%). Similarly, gains in NESTLE (+1.9%) and UNILEVER (+4.5%) pushed the Consumer Goods index 1.0% higher while the Oil & Gas index (+0.3%) was buoyed by price appreciation in FORTE OIL (+4.9%).

Investor sentiment as measured by market breadth (advance/decline ratio) further strengthened to 3.9x from 2.4x recorded the previous session as 31 stocks advanced against 8 decliners. The best performers were FIDELITY (+9.9%), CHAMPION (+8.7%) and FCMB (+7.5%) while the worst performers were LIVESTOCK (-4.5%), MORISON (-3.5%) and NPFMCRFBK (-2.3%).

Following the day’s positive performance, analysts say they expect market performance in subsequent trading sessions to remain positive following increased buying interest in small and mid-cap stocks.

Russia expects OPEC to reach oil-cut deal as group meets in Vienna Thursday

In the U.S the Dow Jones industrial average and S&P 500 reached all-time highs on Wednesday as investors bet the U.S. economy’s momentum would continue.

The U.S. economy has picked up steam this year, growing at an annualized rate of more than 3 percent each of the past two quarters.

“There’s a lot of momentum” in the U.S. economy and that’s being reflected in stocks, said Randy Frederick, vice president of trading and derivatives at Charles Schwab. “I can’t think of anything other than a black-swan event that would derail it.”

The Commerce Department released its second read on third-quarter U.S. GDP, which showed the economy expanded at an annualized rate of 3.3 percent. The number matched estimates and surpassed an initial read of 3.0 percent growth.

UnitedHealth, Verizon Communications and JPMorgan Chase were the best-performing stocks in the Dow, which jumped 70 points.