The Nigerian bourse recorded its largest decline in seven weeks Tuesday as the all-share lost 96 basis points (0.96%) to close at 36,953.41 points. Year-to-date gain thus declined to 37.5 percent.
To this end, market capitalization lost N124.2 billion to settle at N12.8 trillion.
The day’s negative close was on account of losses in NESTLE (-3.1%), ZENITH (-4.7%) and DANGCEM (-0.6%).
Specifically, market activity level weakened as volume and value traded fell 29.1 percent and 88.6 percent to 238.6 million units and N3.4 billion respectively. The relative low level of activity could be traced to high base of yesterday’s trading activity following a one-off cross deal of DANGCEM valued at N27.0 billion
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Sector performance was largely negative with the oil & gas index emerging the lone gainer. The biggest losers were the industrial and banking indices, down 1.4 percent apiece, owing to price depreciations in ZENITH (-4.7%), GUARANTY (-0.3%), DANGCEM (-0.6%) and WAPCO (-2.8%).
The consumer goods index trailed, down 1.3 percent following losses in NESTLE (-3.1%) and UNILEVER (-5.0%). Equally, depreciations in LINKASSURE (-4.6%) and AIICO (-3.6%) dragged the insurance index 0.1 percent lower.
The day’s lone gainer- the oil & gas index- was driven by buying interest in FORTE (+1.4%).
Market Breadth declined further from 0.6x recorded yesterday to 0.3x (11 advancers/31 decliners). The top-performing stocks were VITAFOAM (+5.0%), NAHCO (+4.8%) and NEM (+4.3%) while the worst performers were CAVERTON (-9.4%), CILEASIN (-8.8%) and UNILEVER (-5.0%).
Following the day’s unprecedented loss, Analysts expect bargain hunting to drag market performance positive in subsequent trading sessions.
In tandem with the Nigerian bourse, global stocks fell Tuesday mostly as investors watched for tax reform developments in the U.S. and digested weak manufacturing data from China.
France’s CAC 40 shed 0.3 percent to 5,325 and Germany’s DAX fell 0.2 percent to 13,053.
Britain’s FTSE 100 added nearly 0.1 percent to 7,420. U.S. shares were set to drift lower, with Dow and S&P 500 futures both down 0.2 percent.
Economic growth figures were upbeat for Italy and Germany, which saw growth accelerate to a quarterly 0.8 percent in the third quarter, from 0.6 percent in the previous three-month period. But new data for China disappointed. Its growth in industrial value-added output slowed to an annual rate of 6.2 percent in October, from 6.6-percent in September.
China’s private fixed-asset investment increased 5.8 percent on year in the first 10 months of this year, lower than the 6-percent increase for the first nine months. The Chinese economy is still growing but the focus is on assessing whether that pace is slowing.
Analyst viewpoints summed up the pervading sentiment in the equities market.
“Risk appetite was dithering,” analysts from Mizuho Bank Ltd. said in a commentary. “The mood is certainly nowhere near the exuberance earlier this year.”
The fate of U.S. tax overhaul legislation remains uncertain. It would deeply cut corporate taxes, double the standard deduction used by most Americans, and limit or repeal completely the federal deduction for state and local property, income and sales taxes. It carries high political stakes for President Donald Trump and Republican leaders in Congress.
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Frontpage February 6, 2020