Nigerian stocks sell-offs continue as global markets rebound from weak open

The Nigerian equities market closed negative for the third consecutive trading session Wednesday with benchmark index, NSEASI, shedding 77 basis points or 0.77 percent to settle at 43,538.16 points. However, global markets, which dipped in the past two days, rebounded on the day.

Specifically, the Nigerian market’s year-to-date return (YTD) contracted further to 13.8 percent just as market capitalization fell by N121.5bn to settle at N15.6 trillion.

The day’s negative close can be largely attributed to sell pressure across board with market bellwethers – DANGCEM (-2.2%), NIGERIAN BREWERIES (-2.0%) and STANBIC (-3.5%) weighing the most on performance. Also, activity level softened as volume and value traded declined 29.1 percent and 6.9 percent to 508.3 million units and N4.5 billion respectively.

Performance across board was largely bearish as all indices closed in the red save the banking index, which trended 0.6 percent northwards following gains in ZENITH (+2.6%) and UBA (+1.2%).

The industrial goods index led laggards, as losses in DANGCEM (-2.2%) dragged the index 1.1 percent lower. Similarly, the insurance and oil & gas indices lost 0.8 percent apiece, following price depreciation in AIICO (-4.5%), NEM (-3.2%), MOBIL (-5.0%) and TOTAL (-0.4%).

Also, the consumer goods index slid 0.3 percent as FLOURMILL (-0.6%) and DANGFLOUR (-0.6%) closed the day in the red.

Investor sentiment as measured by market breath (advance/decline ratio) strengthened to 0.5x from 0.4x recorded in the previous session as 18 stocks advanced against 40 decliners.

The top performing stocks were CAVERTON (+9.7%), LINKASSURE (+6.8%) and LASACO (+5.9%) while UNIC (-9.5%), SKYE (-8.9%) and WEMA (-8.8%) were the worst performers.

Analysts say they expect market performance in subsequent trading sessions to remain negative on sustained profit taking.

“However, in light of lower pricing on fundamentally sound stocks we also anticipate more activity in the coming week as investors seek bargain opportunities,” analysts at Afrinvest noted.

A broker who spoke to Businessamlive advised that investors should use the current sell-offs to buy stocks at lower prices.

On the global scene, stock market turbulence eased as Dow gains ground. Stocks rose in choppy trade Wednesday as Wall Street tried to build on the strong gains set in the previous session.

The Dow Jones industrial average climbed 300 points after opening 127 points lower. Boeing and Walmart were the best-performing stocks in the index, rising more than three percent.

The S&P 500 rose 1.2 percent, with telecommunications and industrials as the best-performing sector. The Nasdaq composite traded 0.8 percent higher.

Futures fell sharply before the open, with the Dow tipped to open 300 points lower at one point.

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