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HomeBusinessNigeria's stocks retreat with index down 0.15% as naira weakens

Nigeria’s stocks retreat with index down 0.15% as naira weakens

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By Samuel Bankole

Nigerian equities ended the trading day lower on Thursday, extending a recent pullback as investor sentiment remained cautious.

The All-Share Index shed 0.15%, closing at 97,978.02, mirroring a decline in market capitalization which fell to N55.424 trillion from N55.509 trillion.

Trading activity remained subdued with a total volume of 316.453 million units valued at N7.70 billion exchanged hands across 7,852 deals.

Market breadth was negative, with only 17 stocks advancing compared to 28 decliners.

The NGX 30 Index, which tracks the performance of the blue-chip companies, also dipped 0.15% to close at 3,626.49 points.

FCMB and Seplat were the lone gainers within the index, while Fidelity Bank and Sterling Bank led the losers.

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Market analysts attributed the decline to a combination of factors, including rising overnight and open repo rates.

The overnight rate jumped 1.69% to 32.34%, while the open repo rate rose 1.78% to 31.72%. This increase in borrowing costs could dampen investor appetite for equities.

Adding to the pressure, the Nigerian naira depreciated against the US dollar at the Investor and Exchanger (I&E) window.

The dollar closed at N1,485.66, compared to N1,462.59 at the previous session. A weaker naira can make dollar-denominated investments more attractive, potentially leading to outflows from the local stock market.

The near-term outlook for Nigerian equities remains uncertain. Investors will be closely watching developments in the monetary policy space and the performance of the naira.

If interest rates continue to rise and the naira weakens further, it could dampen investor sentiment and lead to additional stock market weakness.

However, some analysts remain optimistic about the long-term prospects of the Nigerian stock market, citing strong economic fundamentals and attractive valuations.

(Edited by Oludare Mayowa; omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)

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