Nigerian Stock Market Remains Cautious After ₦2.83 Trillion Loss as Investors Rebalance Portfolios

After a sharp ₦2.83 trillion loss last week, the Nigerian stock market is expected to trade cautiously this week as investors continue profit-taking and adjust portfolios to align with fiscal-year targets. Analysts note that both domestic and global economic uncertainties have contributed to sustained bearish sentiment, leaving market participants wary of further volatility.

The Nigerian Exchange (NGX) All-Share Index dropped by 2.99 percent week-on-week to close at 149,524.81 points, reflecting a wave of selling pressure across major bellwether stocks. The overall market capitalisation declined to ₦94.998 trillion as investors reacted to geopolitical tensions involving Nigeria and the United States, as well as end-of-year rebalancing by institutional players.

Analysts at Cowry Asset Management Limited said they expect the market to remain cautious as investors strategically reallocate capital. They added that despite near-term volatility, the strong year-to-date performance shows that market fundamentals remain relatively sound. “Market direction in the coming weeks will depend on inflation, exchange rate stability, corporate earnings, and liquidity from both local and foreign investors,” the firm noted, advising a tilt toward fundamentally strong and defensive stocks.

Afrinvest Limited echoed similar sentiments, projecting that weak investor confidence would likely sustain bearish momentum this week. The firm attributed this to profit-taking across major sectors and limited market-moving catalysts. Market breadth was notably negative, with only 20 gainers compared to 75 losers, indicating widespread selling. NCR Nigeria led the gainers’ list, while Sovereign Trust Insurance topped the decliners’ chart.

In total, 3.58 billion shares valued at ₦107.01 billion were traded in 146,429 deals last week—lower than the previous week’s 7.48 billion shares worth ₦145.43 billion. The Financial Services sector dominated trading with 82.39 percent of total turnover volume. Analysts suggest that as year-end approaches, the Nigerian stock market may continue to experience cautious sentiment, driven by macroeconomic data and investors’ pursuit of portfolio stability.

source: Leadership