Last week, the local bourse saw a mixed outing as the benchmark index took a beating for the second straight week and was driven by bargain-hunting activities and portfolio repositioning.
Thus, the all-share index nosedived by 0.35 percent week-on-week and settled below the 100k mark at 99,671.28 points as investors continued their portfolio realignment across major market sectors ahead of the new earnings season.
Consequently, the market capitalisation of listed equities exhibited a bearish movement, declining by 0.35 percent week-on-week to N56.44 trillion.
This was due to tepid investor sentiment as equity investors incurred a total loss of N139.9 billion over three out of five trading sessions this week, bringing the year-to-date return of the index to 33.30 percent.
Trading activity was notably mixed last week, as evidenced by the total volume and value of trades.
The market breadth was relatively flat, with 38 weekly gainers compared to 39 weekly losers.
As a result, the total traded volume was up by 22.4 percent week-on-week to 2.77 billion units, as well as the total weekly traded value rising by 173.5 percent week-on-week to N85.23 billion.
The total number of trades for the week decreased marginally by 4.80 percent week-on-week to 40,794 deals. Despite the tepid performance of the benchmark index, sectoral performance was weak this week as we saw the NGX-Banking lead the laggards by 2.08 percent week on week and was followed by NGX-Insurance and NGX-Consumer Goods sectors, which declined by 0.36 percent and 0.09 percent week-on-week due to negative price movements in UBA, GTCO, SOVRENINS, CHIPLC, PZ CUSSONS, and TANTALIZER. Conversely, the NGX-Oil & Gas and NGX Industrial indices reported gains of 1.38 percent and 0.05 percent week-on-week. Stocks contributing to these gains included ETERNA, COINOIL, LAFARGE and UPDCREIT.
At the close of the week, notable performers such as LIVESTOCK (+27%), VERITASKAP (+25%), ABCTRANS (+20%), ETERNA (+18%), and VITAFOAM (+18%) emerged as the best-performing securities, driven by positive activities that propelled their price movements.
Conversely, negative investor sentiment led to sell-offs in AFRIPRUD (-18%), PZ (-10%), THOMAS WY (-10%), CWG (-10%), and TANTALIZER (-10%), positioning these stocks as the top losers for the week.
Looking ahead to the upcoming week, Cowry Research thinks market momentum is expected to continue with ongoing bargain hunting and portfolio adjustments in anticipation of the June Consumer Price Index and half-year corporate earnings reports.
Analysts argued that these upcoming economic indicators are likely to influence investor decisions and market trends in the face of weak sentiments.
As the changing market structure and fundamentals persist, investors are advised to position themselves in stocks with sound fundamentals.
Global equities
Sentiments in the global equities market remained upbeat, as cooling US inflation bolstered expectations for an interest rate cut by the Federal Reserve at its September meeting.
Accordingly, US equities (DJIA: +1.0%; S&P 500: +0.3%) were on track for a weekly gain as expectations for upcoming interest rate cuts gained momentum.
This was fueled by remarks from the Federal Reserve Chairman, who indicated that the central bank would consider cutting rates before inflation reached the 2.0 percent target.
Likewise, European equities (STOXX Europe: +0.6%; FTSE 100: +0.2%) remained in the positive territory, supported by (1) a stronger pound, (2) optimistic corporate earnings forecasts, and (3) growing bets for a September rate cut by the US Federal Reserve. Asian markets (Nikkei 225: +0.7%; SSE: +0.8%) were broadly positive, benefiting from the upbeat sentiment on Wall Street, expectations of strong corporate earnings, and better-than-expected export data from China.
Lastly, gains in China (+0.8%) and India (+0.6%) drove the Emerging Markets index (MSCI EM: +1.8%) higher, while the Frontier Markets index (MSCI FM: +0.5%) was driven by positive performances in Vietnam (+0.1%) and Romania (+0.4%).
