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NSE ASI retreats as banking sector falters

What shaped the market today?

• The NSE ASI (-88bps) reversed sharply into the red in today’s session with Banking stocks leading declines likely on the back of quick profit taking in the sector. On the global front, Asian and European markets traded mixed amidst lower than expected Chinese inflation data and oil price volatility. Meanwhile, U.S. stocks opened lower ahead of a news conference from the President-elect.
• Following three consecutive sessions of gains, the Banking sector (-281bps) slid into negative territory as investors locked in recent gains across a handful of tier I names, notably - GUARANTY (-423bps), UBA (-326bps), ACCESS (-323bps) and ZENITHBANK (-252bps). The Consumer Goods (-41bps) and Industrial Goods (-31bps) sectors also traded lower amidst declines in INTBREW (-270bps), DANGSUGAR (-228bps), CUTIX (-952bps) and DANGCEM (-59bps). However, the Oil & Gas sector (+15bps) finally nicked its first positive close of the year as gains in TOTAL (+167bps) and OANDO (+132bps) outweighed declines in MOBIL (-77bps) and FO (-76bps).
• Market breadth turned negative with 18 advances and 30 declines.

What will shape the next trading session?

• We expect the sharp slide across the banking names to cool off tomorrow considering the size of the profit taking observed today. Nonetheless, we believe the market would still likely close lower in the session ahead given the relatively weak appetite in some other key sectors.