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HomeBusinessNigeria's equity market declines on the back of MPC interest rate hike

Nigeria’s equity market declines on the back of MPC interest rate hike

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By Samuel Bankole

The Nigerian equity market closed on a negative note on Tuesday with the main market index inching up marginally by 0.02 per cent, dragged by losses in Union Bank and Unilever shares.

The All Share Index marginally decreased by 0.02 per cent to close at 52,308.88 points compared with 52,319.94 points the previous day.

Also, the market capitalisation of equities listed on the NGX decreased to N28.208 trillion from N28.214 trillion on the previous day.

The total volume traded closed with an exchange of 205.641 million units valued at N2.79 billion traded in 4,127 deals.

However, the market breadth was neutral with 16 gainers as against 16 losers.

The NGX 30 Index marginally decreased by 0.04 per cent to close at 1,898.79 points as against 1,899.50 points at the previous close.

Market turnover closed with a traded volume of 144.27 million units. Lafarge Africa and FBNH were the key gainers, while UBN and Unilever were the key losers.

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Shares in the Union Bank was down by 3.70 per cent, followed by Unilever which dropped by3.2 per cent, International Breweries was down by1.72 per cent while Access Holdings fell by1.08 per cent and Fidelity Bank dropped by 0.94 per cent.

Top gainers include Lafarge Africa with 2.51 per cent gain, FBNH was up by 1.82 per cent, UBA climbed 0.67 per cent while FCMB was up by 0.66 per cent and Dangote Sugar was up by 0.63 per cent.

On the money market, the Overnight (O/N) rate increased by 0.50 per cent to close at 14.50 per cent against the last close of 14.00 per cent.

The increase in the overnight lending rate was attributed to the 100 basis points hike in the benchmark interest rate on Tuesday by the Monetary Policy Committee (MPC).

The Open Repo (OPR) rate also increased by 0.38 per cent to close at 14.38 per cent as against the last close of 14.00 per cent.

The Central Bank of Nigeria (CBN) rate-setting committee hike the Monetary Policy Rate (MPR) by 100 bps to 14.00 per cent due to rising inflation.

However, the asymmetric corridor was retained at +100/-700 bps around the MPR. Furthermore, the Cash Reserve Ratio (CRR) and Liquidity ratio were retained at 27.5 per cent and 30.0 per cent, respectively.

At the I&E forex market, the Naira appreciated by 1.16 per cent as the dollar was quoted at N424.17 against the last close of N429.13.

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