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European Stocks Rebound as Energy Prices Lift Oil Producers, Natural Gas Soars; Bonds Weaken

European equities climbed back from a one-month low in response to surging energy prices, particularly benefiting oil producers. Meanwhile, natural gas prices experienced a sharp rise, while bond markets exhibited general weakness.

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The trading session across Europe unfolded with a relatively subdued tone, with trading volumes on the Stoxx 600 Index approximately a third lower than the usual average. TotalEnergies SE, Shell Plc, and BP Plc were the three main contributors to the index.

In sync with this upward momentum, US futures contracts indicated an impending recovery for the underlying indices following their weakest performance week since early August.

During this period, the benchmark Dutch front-month gas experienced an astonishing surge of up to 18%, attributed to traders incorporating the potential threat of supply disruptions arising from a prospective strike in Australia. Also, the global benchmark Brent traded above the $85 per barrel mark, marking a rise of over 2% since the previous week’s close on Wednesday.

Yields across various tenors saw an upward trajectory, propelling the 10-year yield towards levels not seen since November 2007, while the 30-year yield approached highs reminiscent of 2011. This trend emerged as a result of the selloff in the Treasury market during the current month, erasing the remaining gains for the year.

The resurgence in stock values follows a period of substantial losses, with the MSCI World Index breaking free from a three-week downward spiral. Investors with a keen eye on the global interest-rate trajectory are set to direct their focus towards the upcoming annual gathering of central bankers in Jackson Hole, Wyoming, later this week.

David Henry, investment manager at Quilter Cheviot, emphasized that markets are gradually normalizing post-profit-taking that triggered last week’s retreat. He underscored the existing divergence in the market, highlighting the excessive valuation of certain assets and the marked undervaluation of others. Henry noted investors’ inclination towards quality stocks in preparation for a potential economic downturn, leading them to pay premiums for robustly growing businesses with solid fundamentals.

Friday is anticipated to hold significance as Federal Reserve Chairman Jerome Powell is expected to adopt “a more balanced tone in Wyoming, hinting at the tightening cycle’s end while underscoring the need to hold rates higher for longer,” as stated by Anna Wong from Bloomberg Economics.

In the realm of corporate earnings, the highlight of the week falls on Wednesday’s report from Nvidia Corp., a leading chipmaker whose impressive revenue forecast played a pivotal role in igniting this year’s surge in AI-related stocks.

Conversely, the mood in Asian markets painted a darker picture. The region’s stock gauge extended its decline for the seventh consecutive day, marking the longest losing streak since June 2022. Simultaneously, mainland Chinese shares saw a decline of 1.4%.

Uncertainty surrounding China’s strategy to address the nation’s property market decline weighed on sentiment. Despite policymakers calling for increased lending, Chinese lenders chose to lower the one-year loan prime rate by 10 basis points while maintaining the five-year prime loan rates unchanged. This decision contradicted traders’ expectations of a 15-basis-point cut on both rates.

In other market movements, a gauge of the dollar’s strength displayed minimal fluctuations, while the offshore yuan faced depreciation against the greenback. The People’s Bank of China had previously established the daily reference rate for the yuan at a level stronger than the consensus estimate from a Bloomberg survey.

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Nigerian Exchange Limited

Equities Market Dips 0.04% as Q2 Earnings Hit NGX

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Nigeria’s equities market experienced a slight decline of 0.04% on Wednesday ahead of the second quarter (Q2) financial results.

At the close of trading on the Nigerian Exchange Limited (NGX), the All Share Index (ASI) fell from the previous day’s high of 100,075.59 points to 100,032.32 points.

Similarly, the equities market capitalization decreased from N56.670 trillion to N56.645 trillion.

Jaiz Bank, Cutix, Zenith Bank, Universal Insurance, and FCMB Group were among the most actively traded stocks.

Investors exchanged 1,099,300,929 shares worth N10.076 billion across 8,720 deals.

Several stocks dominated the sell-side, including RT Briscoe, which fell from 70 kobo to 66 kobo, a 5.71% decrease.

FTN Cocoa dropped by 4.44%, while Tantalizer, Neimeth, and Consolidated Hallmark Holdings also saw declines.

The market’s year-to-date (YtD) positive return decreased to 33.78%. While this month has seen a marginal drop of 0.03%, the week still shows an increase of 0.36%.

The dip reflects investor reactions to the ongoing release of corporate earnings for Q2. As companies disclose their financial results, market participants are adjusting their positions accordingly.

As more Q2 financials are released, market volatility is expected. Investors are closely monitoring earnings reports to guide their investment strategies.

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Nigerian Exchange Limited

Nigeria’s Equities Market Gains 0.11%, Adds N62 Billion in Value

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The Nigerian equities market posted a 0.11 percent gain on Tuesday as increased buy-side actions boosted the market’s value by N62 billion.

This positive movement reflects renewed investor confidence and activity in the market.

Leading the charge were stocks like United Capital, UACN, and Cutix. Investors engaged in 8,151 deals, exchanging 368,392,413 shares worth N7.424 billion.

Among the top advancers, United Capital saw a significant rise from N30 to N33, adding N3 or 10 percent.

Cutix also performed well, climbing from N5.08 to N5.58, an increase of 50 kobo or 9.84 percent.

Sunu Assurances and Cornerstone Insurance were other notable gainers, with Sunu Assurances increasing from N1.29 to N1.39, adding 10 kobo or 7.75 percent, and Cornerstone moving from N1.95 to N2.10, up 15 kobo or 7.69 percent.

UACN also saw a substantial gain, rising from N14.15 to N15.20, an addition of N1.05 or 7.42 percent.

The market’s positive return year-to-date (YtD) now stands at 33.84 percent, with a marginal increase of 0.02 percent for the month. So far this week, the market has grown by 0.41 percent.

Key stocks such as Zenith Bank, Access Holdings, GTCO, Jaiz Bank, and UBA were actively traded, indicating strong investor interest.

At the close of trading on the Nigerian Exchange Limited (NGX), the All Share Index (ASI) and equities Market Capitalisation rose from the previous day’s low of 99,966.28 points and N56.608 trillion to 100,075.59 points and N56.670 trillion, respectively.

This uptick in market activity and value reflects growing optimism among investors, buoyed by positive corporate earnings and macroeconomic indicators.

As Nigeria’s market continues to evolve, stakeholders are hopeful for sustained growth and stability in the coming months.

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Nigerian Exchange Limited

NGX All Share Index Climbs to 99,966.28 Points

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The Nigerian Exchange Limited (NGX) rebounded on Monday as the All Share Index (ASI) rose by 0.30%, closing at 99,966.28 points.

This positive development came after a five-day streak of negative closes, bringing renewed optimism to the market.

Investors saw N168 billion gains with stock market capitalization increasing from the previous low of N56.440 trillion to N56.608 trillion.

Among the standout performers were stocks such as Ikeja Hotel, Cutix, RedStar Express, and Sunu Assurances.

Ikeja Hotel saw its stock price rise from N6.35 to N6.95, adding 60 kobo or 9.45%. Cutix experienced an impressive increase from N4.62 to N5.08, gaining 46 kobo or 9.96%.

RedStar Express moved up from N4.05 to N4.38, an increase of 33 kobo or 8.15%, while Sunu Assurances rose from N1.19 to N1.29, adding 10 kobo or 8.40%.

The market’s positive return year-to-date (YtD) increased to 33.70%, though there has been a slight decrease of 0.09% in the month-to-date performance.

Despite this, the overall sentiment remains optimistic, with investors hoping for continued positive momentum.

GTCO, Access Holdings, FCMB Group, Japaul Gold, and UACN were among the most actively traded stocks.

A total of 362.42 million shares worth N7.367 billion were exchanged in 8,405 deals, showcasing robust trading activity and investor interest.

Market analysts attribute the rebound to renewed investor confidence and positive sentiments surrounding key stocks.

“The significant gains in major stocks like Ikeja Hotel and Cutix have boosted investor morale, leading to a broader market recovery,” said a market analyst.

The Nigerian stock market’s recovery comes amid a challenging economic environment, with investors closely monitoring developments both locally and globally.

The positive performance of the NGX ASI on Monday serves as a beacon of hope for market participants, indicating potential stability and growth in the coming weeks.

As the market continues to respond to economic indicators and corporate earnings reports, investors will be keenly watching for sustained positive trends and opportunities for profitable investments.

The NGX’s performance on Monday sets a promising tone for the rest of the week, with market participants eagerly anticipating further gains and stability in the Nigerian stock market.

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