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NSE ASI opens flat amidst profit taking

What shaped the market today?

• The Nigerian bourse began the week flat, as quick profit takers countered gains from sustained bargain buying. Global markets traded mixed as investors digested the result of a key referendum on constitution amendment in Italy and U.S jobs data, which revealed unemployment dropped to its lowest level in almost a decade, further strengthening the case for an interest rate hike by the U.S Fed this month.
• The Oil & Gas sector (+357bps) once again outperformed other sectors after FO (+10.24%), TOTAL (+10.11%) and OANDO (+780bps) rallied. However, MOBIL (-25bps) lost after six straight sessions of gains as investors locked in profit. The Consumer Goods sector closed relatively flat amidst mixed performances across GUINNESS (-974bps), NESTLE (-61bps), DANGSUGAR (+483bps) and NB (+136bps). The Financial Services sector (-51bps) closed lower as advances in ZENITHBANK (+228bps) and FBNH (+158bps) were offset by declines in ETI (-213bps) and GUARANTY (-209bps). The Industrial Goods sector (-145bps) was the session’s worst performer as WAPCO shed 422bps.
• Market breadth turned negative with 15 advances and 27 declines.

What will shape the next trading session?

• We had previously highlighted the possibility of quick profit taking in today’s session following the rally at the close of the past week. We see prospect for further profit taking in subsequent sessions, particularly across energy stocks.