After six trading days of bearish momentum in the Nigeria equities market, trading in the local bourse on Tuesday remained upswing based on buying interest in the banking and oil and gas stocks.
Data from the Nigerian Exchange Group (NGX) on the day’s trading indicated that the NGX-ASI closed up by 0.22% at 97,123.61 and by so doing, investors gained N130.9 billion, pushing the market capitalization to N58.85 trillion.
Activities in the Nigerian Exchange reflected some strategic buying, notable in SOVERENINS and NEM due to an off-market deal today, leading both stocks to top the volume chart and collectively account for 85.04% of the total volume traded.
During the day, SOVERENINS traded 2.49 billion units, while NEM traded 563.7 million units, followed by UBA with 201.9 million units.
Similarly, the market breadth improved to 1.24x, a notable increase from the previous day’s 0.57, with 26 stocks gaining compared to 21 losing reflecting a modestly bullish sentiment. The UD ratio also showed positive trend, indicating higher advancing volume relative to declining volume.
However, despite this, the NGX-ASI remains below key moving averages, including the 7-day MA (97,700.68) and the 20-day MA (98,142.28), signalling that the recent trend remains bearish.
However, the proximity to these averages suggests they may act as immediate resistance levels; breaking above them could indicate strengthening buying momentum and a potential shift in trend.
On sectoral performance, negative sentiment was observed as three of the five sector indexes closed negative. Specifically, the insurance index (-1.33%) led the decliners due to sell-offs in NEM (-2.33%), CONHALLPLC (-2.68%), and MANSARD (-1.69%) just as the industrial and consumer goods index marginally declined by 0.06% and 0.05%, respectively.
In contrast, the banking index appreciated by 3.16%, driven by buying interest in UBA, ACCESSCORP, and ZENITHBANK. Despite a 9.98% decline in OANDO’s share price, the oil and gas index appreciated by 1.55% due to a share price increase in CONOIL.
Based on the market’s trend, analysts at Bancorp Securities Limited advised “investors to continue trading in stocks with strong fundamentals”, as the day’s market summary, including the UD ratio, market breadth, and an improvement in the TRIN, suggested that the market may be entering an accumulation phase as we approach the end of the year.
The experts clarified: “While the RSI and moving averages indicate an ongoing bearish trend, there are signs of potential stabilization. If buying pressure persists and the NGX-ASI breaks above the 7-day moving average, it could gain momentum for a further short-term rally.”
