- Brent oil price rises over 2% to $81.86 a barrel
BY FESTUS OKOROMADU, ABUJA
Sentiment in the Nigeria equity market turned sour on Tuesday as investors took profits off DANGCEM, ZENITHBANK, and GTCO compelling them to shed 2.44 percent, 0.42 percent and 0.90 percent respectively to pressure the market breadth into losing 321.76 basis points.
At the close of trading, the market benchmark index, the NGX All-Share Index declined by 0.44 percent to stand at 71,041.05 basis points, down from 0.17 percent gain recorded in the previous trading session which closed at 71,353.81 basis points.
Consequently, the NGX market capitalization lost N164.76 billion or 0.42 percent to close at N38.88 trillion.
However, the ASI’s year-to-date return remained positive even as it moderated to 38.61 percent.
At the close of trading 40 equities recorded lost as against 19 gainers, as market experts acknowledged that the bearish proceedings in the market were due to sell offs on small and medium weight stocks as investors dumped part of their holdings on OMATEK, IKEJAHOTEL, NEIMETH, WAPIC and CWG; hence their respective share prices declined by 10.00 percent, 9.87 percent, 9.87 percent, 9.72 percent and 9.45 percent.
Performance across sub-sector gauges was mixed, with the NGX Banking and the NGX Consumer Goods indices increasing by 0.06 percent and 0.04 percent respectively.
The NGX Insurance and NGX Industrial Goods indices posted losses of 1.27 percent and 1.25 percent, while the Oil/Gas sector had a lull performance.
Reflective of the negative market sentiment, trading activity further dwindled with total deals, volume and value decreasing by 12.20 percent, 28.40 percent and 5.48 percent, to 8,136 deals, 534.62 million units, valued at N5.62 billion, respectively.
Analysis of stock performance of Tuesday’s trading session showed that ACCESSCORP was the most traded security in terms of volume and value with 52.36 million units worth N942.76 million traded, changing hands in 574 deals.
Brent oil price rises over 2% to $81.86 a barrel
Oil prices jumped over 2% on Tuesday on the possibility that OPEC+ will extend or deepen supply cuts, a storm-related drop in Kazakh oil output and a weaker U.S. dollar. Brent crude futures were up $1.88, or 2.4%, at $81.86 a barrel. U.S. West Texas Intermediate crude gained $1.84, or 2.5%, to $76.70. OPEC+, the Organisation of the Petroleum Exporting Countries and allies including Russia, is due to hold an online ministerial meeting on Thursday to discuss 2024 production targets.
The talks will be difficult and a rollover of the previous agreement is possible rather than deeper production cuts, four OPEC+ sources said.
The market tumbled last week when OPEC+ pushed back the original date for its meeting to iron out differences on production targets for African producers. “Even with the disagreement, the possibility of keeping the deal as is for another month remains high,” said Phil Flynn, an analyst at Price Futures Group in Chicago.
One possible compromise could involve Angola and Nigeria accepting reduced production targets for a few months if targets for the other countries were likewise lowered, said Commerzbank’s Carsten Fritsch.
“According to delegates, Saudi Arabia is demanding lower production quotas from the other OPEC+ countries. While Kuwait has signaled that it would be willing to do so, some countries are apparently resisting any such move,” Fritsch said.
“The United Arab Emirates is likely to oppose this, given that its 2024 production target was increased at its urging when OPEC+ held its previous meeting in early June,” he added.
Oil also found support from a weak dollar, an expected decline in U.S. crude inventories and the drop in Kazakh output. Kazakhstan’s largest oilfields have cut their combined daily oil output by 56%.
Four analysts polled by Reuters estimated that the latest round of weekly U.S. supply reports will show crude inventories fell by about 2 million barrels.
The U.S. dollar sank to a three-month low on Tuesday after U.S. Federal Reserve Governor Christopher Waller flagged the possibility of lowering the Fed policy rate in the months ahead if inflation declines further.
A weaker dollar typically bolsters oil demand, making dollar-denominated oil less expensive for buyers using other currencies.
In the Middle East, Israeli forces and Hamas fighters held their fire beyond the original deadline of a truce, extended at the last minute by at least two days to let more hostages go free.