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Energy sector surge spur ASI to positive open

What shaped the market today?

• Coming off a one-session break following the national holiday, the Nigerian Stock Exchange opened the week firmly in the green as bullish runs across Energy stocks lifted the NSE ASI (+98bps). Global markets traded mixed as investors focused on the upcoming U.S. Fed meeting and digested better than expected Chinese economic data (November Retail sales and Factory output rose 10.8% and 6.2% y/y respectively).
• The Oil & Gas sector (+634bps) continued to lead the pack courtesy of rallies across oil marketers - FO (+10.24%), OANDO (+673bps) and TOTAL (+500bps). SEPLAT also contributed to sector gains as it logged a limit up close, likely catching a lift from the fresh deal between OPEC and Non-OPEC members to cut output. The Industrial Goods sector (+86bps) was next in line after advances in DANGCEM (+125bps) and WAPCO (+46bps). However, PORTPAINT (-480bps) finally bowed to profit taking after an eight session gaining streak. The Financial Services sector (+57bps) also closed higher as gains in FCMB (+29bps), ACCESS (+204bps) and GUARANTY (+197bps) outweighed losses in UBN (-470bps) and ZENITHBANK (-110bps). However, the Consumer Goods sector closed flat following mixed performances across DANGFLOUR (+763bps), HONYFLOUR (+472bps), GUINNESS (-295bps) and 7UP (-77bps).
• Market breadth remained positive with 23 advances and 15 declines.

What will shape the next trading session?

• Even without the rally across Energy stocks, overall market sentiment appears to be improving and the ASI could possibly have closed up. We believe the index could hold on to gains in the session ahead.