Nigeria’s stock market on Tuesday had a volatile session, consolidating its back-to-back gains, while breaking out the recent resistance level of 39,088.89 to test its shortest moving average of 20 on a motive wave of 3 that extended to close the day positive.
NSE Index started out with a gap up in the morning session which was sustained till mid-morning and the noon hour, rallying to intraday highs of 39,425.61 basis points from the low of 38,843.04bps, before pulling back in the afternoon to close at 39,167.04bps on a mixed sentiment, as profit taking ensued.
Tuesday’s market technicals were positive and mixed as traded volume was low in the midst of positive market breadth and improving buying interests amidst traders cashing out profit from the recent rally.
Investdata Daily Sentiment Report reveals investors buying pressure of 56% and selling volume of 44% on a volume index of 1.03 of the day’s total transactions.
Momentum behind the buying sentiment for the day was reflected on the money flow index at 30.84 points from the previous day’s 24.26 points, which is an indication of improving funds that are still entering the market as at close of business on Tuesday, with investors and traders demanding for medium and high cap stocks while continuing to reposition their portfolios as release dates draw closer for March year-end accounts.
Index and Market Cap
The benchmark NSE All-Share index gained 321.73 basis points to close at 39,167.04bps, after opening at 38,845.31bps, representing a 0.83% growth on a relatively low volume that was lower than the previous day’s. Similarly, market capitalisation went up by N116.54bn to close at N14.19tr from an opening value of N14.07tr, which also represented 0.83% value appreciation. This further boosted the year-to-date position and reduced players losing position in the aftermath of an eleven-day down market.
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The second daily upturn for the week resulted from value gain in medium and high cap stocks like Seplat, Dangote Cement, Nestle, 11 Plc, UBN, UBA, FBNH, Stanbic IBTC, Dangote Flour and Honeywell. These impacted positively on the NSE’s Year-to-Date gain, which climbed to 2.42%; while market capitalisation gain for the period stood at N578.81bn, representing 4.25% above the year’s opening value.
Bullish Sector Performance
Sectorial performance across board was bullish except for the NSE Banking that closed marginally lower, due to profit booking in Guaranty Trust Bank, Zenith Bank and Access Bank. Other sectoral indexes closed higher in the same direction with the general market. The NSE Oil/Gas sector was the top performer with 4.9%, ahead of on the back of price appreciation by Seplat and 11 Plc. The NSE insurance, Consumer and industrial goods were boosted by value gain in Equity Assurance, NEM, Wapic, Nestle, Honeywell and Dangote Cement.
Market breadth was positive with advancers outnumbering decliners in the ratio of 27:21 to continue the two-day up market.
Market activities were mixed as volume was down by 43.4% to 341.48m shares from the previous day’s 603.17m units, while value was up at N5.19bn, from Monday’s N3.89bn. The day’s volume was boosted by trading in financial services and consumer goods stocks like United Capital, Dangote Sugar, Africa Prudential, GTBank and UBA that witnessed increased trading to top the activity chart.
The best performing stocks for the session were Seplat and 11 Plc that topped the advancers’ table, with 8.1% and 5% respectively to close at N769.00 and N183.00 each. This was as a result of market sentiment and forces.
On the flip side, Prestige Assurance and Eterna were the worst performing, losing 4.7% and 4.5% respectively to close at N0.61 and N5.97 on profit booking.
We expect profit booking by traders to slow down the recovery move ahead of the forthcoming long holiday. Volatility is likely to continue as investors and other players rebalance their portfolios for March full-and half year earning season as equities remain undervalued with higher yields. Investors should review their position in line with their investment goals and take action as events as it unfolds in the global and domestic environment.
However, we would like to reiterate our advice that investors should go for equities with intrinsic value, especially during this season were less earnings are released ahead of march full year earnings release and Q2 interim dividend payment are expected in the market arena very soon.
We advise investors to allow numbers guide their decisions while repositioning in any stock, especially now that stock prices remain volatile amidst improving company, economic and market fundamentals.