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Late rally halts NSE ASI skid

What shaped the market today?

• After long hours of trading in the red, the Nigerian Bourse pulled a late comeback to close marginally up, buoyed by gains in DANGCEM and select Consumer Goods names. On the global scene, Asian stocks advanced, helped by a rise in oil prices following a surprise drawdown in U.S oil inventories (according EIA estimates). Conversely, European markets traded lower as investors exercised caution ahead of the U.S non-farm payroll data due Friday. U.S. markets also opened lower.
• The Consumer goods (+41bps) sector outperformed other key sectors largely on gains in 7UP (+837bps) and FLOURMILL (+499bps). The Industrial Goods (-307bps) sector shed the most points at the close of the session following sell-offs in WAPCO (-949bps) and ASHAKACEM (-762bps); contribution of DANGCEM (+110bps) to the sector performance was capped amidst NSE weighting limit methodology, but uncapped for the overall ASI. The Financial Services (-28bps) sector also closed lower owing to losses in ETI (-228bps), GUARANTY (-100bps) and FBNH (-97bps). The Oil & Gas sector (-9bps) however closed relatively flat following mixed closes across OANDO (-500bps), TOTAL (-271bps), SEPLAT (+101bps) and FO (+88bps).
• Market breadth remained negative with 20 advances and 26 declines.

What will shape the next trading session?

• Excluding the gains in DANGCEM, we note that the ASI would have closed in the negative. We believe this underscores the overall current bearish mood of the market even as market breadth remains negative. In light of this, we maintain a bearish bias over trading in the session ahead.