The Nigerian equities market continued its downward trend on Wednesday, its third consecutive day of losses as investors increasingly adopt a risk-off stance.
The All-Share Index (ASI) of the Nigerian Exchange Limited (NGX) dipped by 0.14% to close at 97,199.6 points, down from the previous day’s high of 97,390.01 points.
This decline reflects the market’s ongoing struggles, exacerbated by a lack of positive triggers and elevated fixed-income rates.
The cumulative effect of this week’s losses has led to a 1.36% decrease in the market, further eroding investor confidence. Since the beginning of the month, the market has seen a marginal decline of 0.11%.
The downturn has particularly affected insurance and banking stocks, which were predominantly on offer at the Lagos Bourse, driving the broader market indices into the red.
Investors saw a significant reduction in their portfolios, with the equities market capitalization shrinking from N55.295 trillion to N55.187 trillion.
This translates to a loss of approximately N108 billion in market value, a substantial hit in an already challenging economic climate.
The market’s year-to-date (YtD) return also took a hit, decreasing to 30.06% from earlier highs. Analysts attribute the continued sell-off to the attractiveness of fixed-income securities, which have drawn investors away from the equities market due to higher yields.
The absence of positive economic indicators or corporate earnings surprises has left the market vulnerable to further declines.
Wednesday’s trading session saw 315,302,176 shares exchanged in 8,365 deals, with a total value of N5.480 trillion.
Despite the high volume of trades, the overall market sentiment remained bearish, with investors cautious about re-entering the market amidst ongoing uncertainties.
As the week progresses, market watchers are keenly observing for any potential catalysts that could reverse the negative trend.
However, with the current macroeconomic environment and fixed-income market dynamics, the equities market may continue to face headwinds in the near term.
Investors are advised to remain vigilant and consider diversification strategies to mitigate risks in the volatile market.
