By Samuel Bankole
Nigeria’s equities market closed in the red on Wednesday, with the All Share Index (ASI) dropping 0.35% to settle at 96,537.48 points.
The market capitalization declined to N55.454 trillion from the previous session’s N55.647 trillion, reflecting a contraction in investor sentiment amid broader economic uncertainties.
The day’s trading session saw 389.23 million shares exchanged in 12,039 deals, valued at N8.18 billion. Market breadth was negative, with 33 stocks recording losses against 21 gainers.
Key decliners included Dangote Sugar and Zenith Bank, while Fidelity Bank and Transcorp emerged as top gainers, highlighting a mixed sentiment among investors.
The NGX 30 Index, which tracks the top 30 companies on the Nigerian Exchange, also fell by 0.13%, closing at 3,582.27 points, down from 3,586.95 at the previous close. Turnover within the index reached 126.69 million units, signalling cautious trading ahead of key market data releases.
In the money market, short-term rates surged, with the Overnight (O/N) rate climbing by 5.65 percentage points to 29.18%, up from 23.53% on Tuesday.
Similarly, the Open buyback (OBB) rate increased by 5.42 percentage points to close at 28.39%, compared to 22.97% in the prior session, reflecting tighter liquidity conditions.
At the Investors and Exporters (I&E) foreign exchange window, the naira depreciated further against the dollar, trading at N1,625.88 compared to N1,611.34 in the previous session.
This continued downward pressure on the naira signals ongoing challenges in stabilizing the local currency amid Nigeria’s broader economic struggles.
Market Trends and Outlook
The equities market has been volatile in recent weeks, impacted by inflationary pressures, policy uncertainty, and global economic headwinds. As investors digest the Central Bank of Nigeria’s latest monetary policy stance and await further clarity on fiscal reforms, market participants are likely to remain cautious.
In the money markets, rising rates suggest tighter liquidity, which may persist in the short term as the central bank continues its efforts to manage inflation. Currency depreciation remains a concern, with analysts predicting further weakening of the naira unless significant foreign exchange inflows materialize.
Despite Wednesday’s decline, analysts expect pockets of buying opportunities, particularly in consumer goods and banking sectors, which could rebound on improved earnings performance and attractive valuations. However, broader market performance is expected to hinge on macroeconomic stability and policy direction in the coming months.
(Edited by Oludare Mayowa; omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)
