The Nigerian stock market continued southwards as observed yesterday. The All Share Index (ASI) dipped 0.2% on Tuesday to close at 26,540.87 points due to sell pressure in FORTE (-9.7%), GUARANTY (-1.9%) and DANGSUGAR (-0.5%). Accordingly, market capitalization eased by N15.7bn to settle at N9.1tn. Market activity was however mixed as volume traded dipped 5.4% while value traded rose 77.5% to close at 248.7m units and N3.1bn respectively.
Oil & Gas Index Emerges Top Decliner
Of the five major sectors we track, two indices, led by the Industrial Goods index appreciated while three depreciated. The Industrial Goods index was up 0.9% on increased interest in WAPCO (+2.6%) while the Insurance index added 0.4% as a result of price appreciation in NEM (+5.0%) and WAPIC (+0.5%). On the flip side, the Oil & Gas index recorded the highest pullback, down 1.8% as FORTE (-9.7%) and ETERNA (-1.7%) shed points. This was followed by the Banking index which slid 0.4% due to declines in GUARANTY (-1.9%) and ZENITH (-0.1%). The Consumer Goods index also eased 0.1% on account of DANGSUGAR (-0.5%) and UNILEVER (-4.3%).
Interestingly, investor sentiment improved today as market breadth strengthened to 1.1x (from 0.6x yesterday) with 21 stocks advancing against 20 declining stocks. The best performing stocks were NASCON (+5.3%), NEM (+5.0%) and JBERGER (+5.0%) while FORTE (-9.7%), INTERLINK (-5.0%) and VITAFOAM (-4.9%) declined the most. We are of the opinion that the current trend in the stock market remains largely driven by profit taking, mostly in select market bellwethers as well as Oil & Gas stocks. This is unsurprising after the rally observed in the prior week. We expect performance for the rest of the week to continue in similar manner but we do not rule out the possibility of a marginal uptick at the tail end of the week.