Nigerian stocks retreat on sell-offs, profit taking as market index dips 0.03%

Nigerian stocks retreated Thursday after a 3-day bull-run as benchmark index retracted 0.03 percent to close at 36,887.15 points majorly on sell-offs and profit taking on bellwethers, Nigerian Breweries, Dangote Cement and Unilever.

This just as most U.S. stocks fell on the day as investors reacted to tax plan details

The day’s negative performance at the Nigerian bourse had year-to-date gain moderating to 37.2 percent as large caps fell due to profit taking like NIGERIAN BREWERIES (-3.2%), DANGCEM (-0.2%) and UNILEVER (-2.4%).

As a result, market capitalization reduced by N3.5 billion to settle at N12.8 trillion. However, activity level was mixed as volume traded inched 27.6 percent higher to 318.1 million units while value traded declined 24.1 percent to N4.0 billion respectively.

Sector performance was equally mixed at the close of trade. The banking and insurance indices closed positive, rising 0.7 percent apiece due to a rally in UBA (+4.1%), ETI (+1.2%), MANSARD (+2.9%) and CONTINSURE (+2.3%).

Conversely, the consumer goods index depreciated the most, down 1.2 percent due to profit taking in NIGERIAN BREWERIES (-3.2%), UNILEVER (-2.4%) and PZ (-4.0%). Similarly, losses in DANGCEM (-0.2%) dragged the industrial goods index 0.1 percent lower, while the oil & gas index closed flat.

Investor sentiment further strengthened as market breadth (advancers/decliners’ ratio) improved to 1.5x – from 1.0x recorded in the previous trading session – consequent on 27 stocks advancing against 18 that declined.

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Top performers were FBNH (+9.2%), FLOURMILL (+4.9) and UPL (+4.9%) while CUSTODYINS (-5.0%), TRANSEXPR (-4.9%) and AIRSERVICE (-4.9%) were the worst performers.

Although market performance was dragged by profit taking, investor sentiment strengthened. Hence, analysts say they expect to see a rebound in subsequent trading sessions.

Equally, analysts say the sustained rally in oil prices – above US$60.00/b- may bear positively on the market and the economy in general.

In the U.S. stocks fell with the dollar, while treasuries advanced as investors reacted to details of the Republican plan to cut taxes.

American benchmark indexes were mixed as investors parsed the details for winners and losers. Small caps advanced on the proposal to cut the corporate tax rate, while the S&P 500 Index fell as the housing sector was walloped on changes to how mortgage interest will be treated.

Rate-sensitive shares including utilities advanced as treasury yields slumped below 2.35 percent. Facebook Inc. lost more than 2 percent after earnings disappointed, weighing on tech shares before Apple Inc. reports later Thursday. Time Warner Inc. tumbled on a Dow Jones report that the Justice Department may reject its takeover by AT&T Inc.