Stock markets across the Euro-area closed lower on Monday as fast spreading omicron COVID-19 variant forced countries to lock their borders and imposed stricter measures to avoid 2020 catastrophy.
European Stoxx 600 dipped by 1.4 percent, with autos shedding the largest at 2.7 percent. Travel stocks depreciated by 1 percent, largely due to restrictions announced in The Netherlands on Sunday and a report of likely lockdown in Denmark this week.
However, a report by Moderna Inc helped contain the decline. Moderna had said the booster dose of its COVID-19 vaccine appeared to be effective against Omicron COVID variant in laboratory testing.
“Headlines about booster shots working against the Omicron variant are providing little support, but if we are heading towards more movement restrictions and as long as virus cases continue to rise, we will see stock markets remain under pressure for awhile,” said Equiti Capital analyst David Madden.
British equities market, FTSE 100 Index shed 1 percent, driven by weakness recorded in commodity-related stocks and more than 5 percent decline in oil prices.
The decline was triggered by a series of lockdown restrictions expected to be announced in the Euro-area this week. Netherlands entered full lockdown on Sunday until January 14, 2022, according to caretaker Prime Minister Mark Rutte.
He said “The Netherlands is going into lockdown again from tomorrow,” he said, adding that the move was “unavoidable because of the fifth wave caused by the omicron variant that is bearing down on us.”
Micheál Martin, Irish Prime Minister, better explained the continent situation in address to the nation, saying the new restrictions were needed to protect lives and livelihoods from the resurgent virus.
“None of this is easy,” Martin said Friday night. “We are all exhausted with Covid and the restrictions it requires. The twists and turns, the disappointments and the frustrations take a heavy toll on everyone. But it is the reality that we are dealing with.”
Investors Lose N720bn in Midweek Sell-Offs
Investors at the Nigerian Exchange Group lost N720 billion on Wednesday, the third consecutive day of bearish activity on the exchange.
The Exchange has now lost a combined N1.54 trillion in the last three days.
On Wednesday, the All-Share Index plummeted by 1.31% to 99,302.37 points while market capitalization dropped to N54.32 trillion. This downward spiral brought the year-to-date returns to 32.80%.
Market breadth remained negative with only five gainers compared to 52 decliners.
Notable gainers included PZ Cussons, Juli Plc, and Axa Mansard, while FCMB Group, Lafarge Africa, and Nigerian Breweries led the decliners with losses of 10% each.
Bearish sentiments spread across various sectors, particularly Banking, Insurance, and Consumer Goods, experiencing declines of 6.90%, 3.72%, and 1.20%, respectively.
The negative trend was fueled by sell-offs in prominent stocks like Sterling Financial Holdings, Wema Bank, and AccessCorp.
Despite improved trading volume and total deals, which rose by 41.28% and 15.40% respectively, the total traded value fell by 4.80% to N5.83 billion.
Transcorp Plc emerged as the most traded security by volume, while Zenith Bank led in traded value at N1 billion, indicating mixed sentiments among investors amidst market uncertainties.
FBN Holdings, Multiverse, MTN Nigeria Lead Losers on Nigerian Exchange
FBN Holdings, Multiverse, and MTN Nigeria emerged as the top losers on the Nigerian Exchange Limited (NGX) on Tuesday as market capitalisation dipped by N773 billion.
FBN Holdings, one of the most capitalized financial firms, declined by 10% to close at N30.60 per share.
This drop comes after the company had recently risen to prominence in the financial sector.
Multiverse, an active player in the industrial goods sector, also shed 10% to settle at N15.30 per share while MTN Nigeria saw its shares dip by 9.94% to N222.90 per share.
The downward trend in these key stocks contributed to the overall bearish performance of the Nigerian Exchange as the All-Share Index dipped by 1.39% and market capitalisation moderated to N55.04 trillion.
Market sentiment remained negative, with 27 losers outweighing 10 gainers, indicating widespread sell-offs across various sectors. Africa Prudential Plc, Omatek, and Juli Plc were among the few gainers.
Despite the challenges faced by these companies, market analysts remain cautiously optimistic about the prospects of the Nigerian Exchange.
They emphasize the importance of monitoring market dynamics and making informed investment decisions amidst the prevailing volatility.
As the Nigerian Exchange navigates through turbulent waters, investors are advised to exercise prudence and diligence in their investment strategies to mitigate risks and capitalize on potential opportunities that may arise in the market.
Nestle, Eterna, Fidson Drag Nigerian Exchange Down, Wiping Out N51bn
The Nigerian Exchange (NGX) opened the week in the red as Nestle Plc, Eterna, and Fidson Healthcare Plc closed lower to wipe out a combined N51 billion from the market capitalization.
Nestle Plc shed 10 percent to close at N990 per share while Eterna and Fidson Healthcare Plc plummeted by 9.97 percent and 9.82 percent to settle at N15.80 and N15.15 per share, respectively.
At the close of trading, the All-Share Index (ASI) dipped by 0.09 per cent to 101,995.53 points and the NGX market capitalization fell to N55.81 trillion.
This downturn reflects investors’ concerns about the stability of these key companies amidst broader economic uncertainties.
Analysts had anticipated a bearish sentiment as investors sought guidance from economic policymakers and corporate earnings reports.
With the NGX struggling to find solid footing, investors remain cautious about their portfolio allocations, especially with rising fixed-income yields and impending monetary policy decisions.
The trading session saw a marginal increase in transaction volume, rising by 1.14 percent to 294.32 million units.
However, the value of transactions surged by 12 per cent to N6.72 billion, indicating intensified trading activity despite the overall market decline.
Also, the number of deals rose by 29 percent to 9,957, showcasing heightened market participation.
While the banking sector recorded a modest 1.35 percent gain, driven by increased interest in FBN Holdings, JaizBank, and Sterling Financial Holdings Plc, other sectors faced challenges.
The consumer goods and oil/gas sectors experienced notable declines, contributing to the overall negative sentiment.
As market participants await corporate earnings reports and the outcome of the Monetary Policy Committee meeting, the NGX remains susceptible to volatility, highlighting the need for cautious investment strategies in the current economic landscape.
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