Equity transactions on the Nigerian Stock Exchange resumed for the week on Monday on a negative note as the market capitalisation depreciated by N28bn or 0.30 per cent.
The situation followed price losses recorded by some major stocks.
The market capitalisation closed lower at N9.399tn, down from the N9.427tn recorded on Friday.
Also, the All-Share Index, which opened at 27,450.91, dropped by 82.5 points to close at 27,368.41.
NAHCO lost 17 kobo to close at N3.23 and NASCON and Africa Prudential Registrars dipped by one kobo each to close at N7.9 and N2.65 per share respectively.
On the other hand, 7UP led the gainers’ chart with N3.98 to close at N116.98 per share, while Champion gained nine kobo to close at N2.7.
Also the NPF Microfinance Bank, Dangote Flour Mills and Honeywell Flour Mills grew by four kobo each to close at 99 kobo, N3.9 and N1.4 per share, respectively.
The Financial Service Sector remained the delight of investors as FBN Holdings emerged as the most traded stock, accounting for 11.66 million shares worth N34.95m.
The FCMB followed with an exchange of 8.83 million shares valued at N9.31m, while Zenith Bank sold 7.84 million shares worth N119.96m.
Diamond Bank traded 7.62 million shares valued at N8.19m, while UBA transacted 7.19 million shares worth N31.97m.
In all, the volume of shares traded declined by 70.01 per cent as investors exchanged 83.83 million shares worth N711.12m in 2,279 deals.
This was against the 279.56 million shares valued at N3.70bn traded in 3,255 deals on Friday.
Libyan Oil Field and Gas Link to Italy Reopen After Protesters Withdraw
Following a brief interruption, operations at an oil field in western Libya and a natural gas link to Italy have resumed as protesters retreated from the facilities.
The demonstrators withdrew after receiving assurances from the government regarding their demands.
The Wafa oil field, which typically produces between 40,000 to 45,000 barrels per day, recommenced shipments after a temporary halt prompted by guards’ demands for improved compensation.
Similarly, the gas pipeline connection to Italy is once again operational, according to sources familiar with the situation who preferred anonymity due to the sensitivity of the matter.
Protests disrupting energy infrastructure and output are not uncommon in Libya.
In recent times, demonstrations have frequently disrupted operations, with the significant Sharara oil field experiencing prolonged suspension last month due to similar protests, invoking a force majeure clause in contracts.
The resumption of activities marks a relief for both the Libyan energy sector and Italy, which heavily relies on the natural gas link for its energy needs.
However, the incidents underscore the ongoing challenges faced by Libya in maintaining stability within its vital energy infrastructure amidst socio-political unrest.
Efforts to address the grievances of protesters and ensure sustained operations remain pivotal for the country’s economic well-being and regional energy dynamics.
Oil Prices Dip on Monday as Dollar Gains
Oil prices experienced a downturn, extending losses from the previous session as the U.S. dollar surged against global counterparts to impact market sentiment.
Brent crude oil, against which Nigerian oil is priced, slipped by 0.2% to $81.48 a barrel while U.S. West Texas Intermediate crude (WTI) declined by 0.3% to $76.27 a barrel.
The upward trajectory of the dollar renders oil more costly for holders of other currencies, contributing to the decline in oil prices.
This downward trend follows a week of losses, with Brent declining approximately 2% and WTI falling over 3%.
Market participants attribute these fluctuations to concerns about inflation potentially delaying anticipated cuts to high U.S. interest rates. Such expectations have been suppressing global fuel demand growth.
Analysts observe a retreat in the risk-on sentiment, coinciding with heightened expectations of prolonged interest rates.
Tina Teng, an independent analyst based in Auckland, notes that the recent market rally led by Nvidia has stalled, as elevated rate expectations bolster the U.S. dollar, thereby pressuring commodity prices, including oil.
Despite geopolitical tensions such as the Israel-Hamas conflict and attacks on ships in the Red Sea, which could have traditionally boosted oil prices, the impact remains modest.
Moreover, investors are monitoring developments surrounding Russian oil supply following recent U.S. sanctions on Moscow’s leading tanker group.
Amidst these uncertainties, Qatar’s decision to increase liquefied natural gas production further adds to global energy supplies.
Crude Oil Dips Slightly on Friday Amid Demand Concerns
On Friday, global crude oil prices experienced a slight dip, primarily attributed to mounting concerns surrounding demand despite signs of a tightening market.
Brent crude prices edged lower, nearing $83 per barrel, following a recent uptick of 1.6% over two consecutive sessions.
Similarly, West Texas Intermediate (WTI) crude hovered around $78 per barrel. Despite the dip, market indicators suggest a relatively robust market, with US crude inventories expanding less than anticipated in the previous week.
The oil market finds itself amidst a complex dynamic, balancing optimistic signals such as reduced OPEC+ output and heightened tensions in the Middle East against persistent worries about Chinese demand, particularly as the nation grapples with economic challenges.
This delicate equilibrium has led oil futures to mirror the oscillations of broader stock markets, underscoring the interconnectedness of global economic factors.
Analysts, including Michael Tran from RBC Capital Markets LLC, highlight the recurring theme of robust oil demand juxtaposed with concerning Chinese macroeconomic data, contributing to market volatility.
Also, recent attacks on commercial shipping in the Red Sea by Houthi militants have added a risk premium to oil futures, reflecting geopolitical uncertainties beyond immediate demand-supply dynamics.
While US crude inventories saw a slight rise, they remain below seasonal averages, indicating some resilience in the market despite prevailing uncertainties.
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