Nigerian stocks trade low as earnings season fail to lift market while global stocks spike

Nigerian stocks trade low Monday as benchmark index fell 0.48 percent despite improved earnings report trickling in. This is just as earnings season distracted European investors from the Catalonia crisis to boost market moderate gains.

In the US, stocks also hit record highs on Monday as Wall Street geared up for the busiest week of the earnings season.

Specifically, at the close of trade Monday, the Nigerian equities market recorded a negative performance as the all-share index fell 48 basis points to close at 36,411.73 points, while YTD return eased to 35.5 percent. Accordingly, market capitalization shed N60.4 billion to settle at N12.5 trillion.

The major drags on the market were ZENITH (-3.4%), WAPCO (-9.8%) and NIGERIAN BREWERIES (-1.9%). However, activity level improved as volume and value traded rose 138.0 percent and 43.4 percent to settle at 253.5 million units and N2.7 billion respectively.

Performance across board was largely bearish, as all indices under coverage closed in the red save for the oil & gas index, which closed flat. The industrial goods index led losers, down 4.0 percent solely on account of investors’ reaction to WAPCO’s (-9.7%) weak Q3 earnings while the insurance index trailed, losing 1.2 percent on the back of sustained profit taking in MANSARD (-4.9%) and LINKASSURE (-4.6%).

Similarly, the banking index declined 50 basis points as ZENITH (-3.4%) recorded losses while the consumer Goods index (-0.2%) closed lower, consequent on depreciation in NIGERIAN BREWERIES (-1.9%) and GUINNESS (-0.6%).

Investor sentiment improved as market breadth rose marginally to 0.6x from 0.5x recorded last Friday, as 15 stocks advanced against 24 decliners.

The best performing stocks today were INTBREW (+10.2%), REDSTAREX (+4.8%) and UACN (+4.8%), while the worst performers were WAPCO (-9.7%), CUTIX (-9.6%) and MANSARD (-4.9%).

Against the backdrop of sustained losses, analysts say they expect a rebound in performance in subsequent sessions as investors take advantage of bargain opportunities amid Q3 earnings releases.

In the NASD OTC exchange, two counters traded with total volume and value of transactions closing at 310,850 units and N3.4m respectively. CSCS (-7.1%) closed in the red, while NDEP (+10.0%) closed in the green.

In the United States, the Dow Jones industrial average rose 23 points, previously notching an intraday record. Home Depot and Johnson & Johnson both rose more than 1 percent, contributing the most to the gains on the 30-stock index.

The S&P 500 traded flat after hitting an all-time high, with health care leading advancers and industrials lagging. Seagate Technology was the best-performing stock in the index, surging more than 11 percent on stronger-than-expected earnings.

Similarly, European markets posted modest gains by Monday’s close, as investors pored over fresh corporate earnings and tried to shake off any concerns surrounding Spain’s ongoing constitutional crisis.

The pan-European Stoxx 600 came off its session highs by the close, yet finished up 0.16 percent provisionally, while the majority of sectors ended in the black.

The U.K.’s FTSE 100 closed up 0.02 percent by the close, while the German DAX popped 0.09 percent. France’s CAC 40, however, rose 0.27 percent by the end of the trading day.

Japanese stocks equally closed higher for a 15th consecutive day while other Asian shares wavered on Monday following a snap election in Japan on Sunday. The dollar also spiked to more than three-month highs against the yen during the session.