The Nigerian stock market recorded its steepest single-day decline this month as the All-Share Index ASI fell by 1.23 percent on Monday on widespread sell-offs following renewed global trade tensions.
The development led to a N659 billion erosion in market capitalisation as investors reacted to U.S. President Donald Trump’s uncompromising stance on tariff impositions that sparked panic across major equity markets worldwide.
The ASI dropped from 105511.89 points to 104216.87 points, while market capitalisation declined from N66.147 trillion to N65.488 trillion at the close of trading.
The market’s year-to-date return moderated to 1.25 percent to reflect weakened investor sentiment.
Global markets also experienced declines with the S&P 500 plunging by 2.3 percent and the Dow Jones Industrial Average falling 1015 points or 2.6 percent.
The Nasdaq Composite Index shed 1.9 percent, entering deeper into bear territory. In total, the U.S. markets lost over $5.3 trillion in value in two days.
Across Europe and Asia, similar losses were recorded as investors priced in the global economic risks associated with escalating tariffs.
The FTSE 100 opened over 5 percent lower, while Germany’s DAX index fell 10 percent within minutes of opening before staging a partial recovery. Hong Kong’s Hang Seng Index recorded its fourth-biggest one-day drop on record.
Back home, the Nigerian Exchange recorded 15,690 deals with 44,4106,631 shares worth N11.148 billion exchanged by investors. High-volume stocks like Oando and Honeywell Flour Mills contributed to the market’s decline.
Oando fell by N4.20 or 10 percent to close at N37.80 while Honeywell dropped 9.98 percent to N10.19.
Market analysts at Futureview Research attributed the downturn to cautious investor sentiment driven by global tariff concerns and the upcoming Primary Market Auction.
“Investors are adopting a selective approach focusing on fundamentally sound undervalued and dividend-paying stocks in search of stability” the analysts said.
United Capital Research in its April 7 update noted that the elevated interest rate environment in the fixed-income space is dampening interest in equities.
The firm highlighted that the upcoming Monetary Policy Committee meeting in May is further reinforcing a wait-and-see posture among investors.
“Retail investors are also engaged in profit-booking which is contributing to sell pressure and impeding the market’s upward momentum” United Capital stated.
Despite the bearish trend market watchers believe sentiment could shift marginally in the short term as investors position for full-year 2024 earnings releases and potential corporate action declarations.
However, persistent macroeconomic uncertainty and global trade disruptions are expected to remain significant headwinds.
The continued volatility in global markets underscores the interconnectedness of financial systems and highlights the vulnerability of frontier markets like Nigeria to external shocks.
Analysts expect near-term trading to remain cautious as investors seek clarity on monetary policy direction and the potential fallout of sustained geopolitical tensions.
