Market Update for June 10
Trading on the Nigerian Exchange for the first day after the long holidays to mark the Muslim holiday of Eid-el-Kabir, started on a positive outing in the face of volatility and mixed session of profit taking and buying interest in some blue-chip companies. This pushed the index’s action to cross the 115,000 mark, testing 115,327.60 basis points, continuing five consecutive sessions of winning streak.
This positive momentum followed market players’ positioning in highly priced stocks in the midst of the rising investor confidence and mixed sentiment,even as the benchmark NGX All-Share index closed higher on a less than average traded volume and positive market internals, with money flow index inching up.
What does this Money Flow recovery and the overall uptrend mean for the longer-term momentum? Will this trend continue or reverse? There is need to avoid panic selling, or the fear of missing out (FOMO) in this market scenario. However, let your trading plan and investment objective guide your entry and exit.
As noted above, the NGX tested another new high at 115,327.60bps for the first time in the history of the market in the phase of markup and expectation of improving macroeconomic data to reflect the government’s economic reforms and better corporate earnings at the end of the first half of 2025 to further boost performance of stock prices on the exchange. Also, there are factors such as improved investor confidence and the ongoing positive market sentiments, just as some stocks are hitting new 52-week highs heading to breakout the 200 moving average.
Buying momentum is still evident in the market, despite the mixed sentiment at the end of Tuesday’s trading and what is happening across global stock markets, as the US-China trade tariffs negotiation slows down volatility on an agreement to high-level framework that would address export control disputes and others. Also, all eyes are on economic data from the two largest economies, such as the U.S consumer price index report that is due today, while the UK reviews spending to set out the budget for all government agencies or departments.
Traders and investors should watch momentum, price action and market structure while timing their trades for entry and exit amid continuing portfolio rebalancing on the exchange.
The NGX had another gain with funds leaving the market, despite position taking in some mid and blue-chip companies, as players continue to navigate and watch trends, targeting value on the strength of companies’ performance and prospect, looking at growth and defensive stocks with strong earnings power and positive technicals in the face of sector rotation persisting. The market is still on a strong wave, even as it’s retracing up in the midst of sector rotation, consolidation moves in some industries and sectors.
Technically, money flow and other momentum tools were mixed, indicating that funds left the market on buying momentum that presents opportunities to buy low and sell high in the midst ongoing volatility and uptrend. The index inched higher on a buying interest, thereby creating the perfect setup for high probability of continuation to catch better-than-expected corporate earnings to reposition at the right price. Also, the index still trades above T-line and the two moving averages of 50-EMA and 50-SMA which reveals strength in the midst of changing market fundamentals and technicals on the NGX and the economy.
Market pulse as revealed by candlestick formation and momentum indicators, shows that the ADX is looking up to read 44.92 points, while RSI and Money Flow Index were up at 85.40 and 62.59points against the previous session’s 84.96 and 61.89 points respectively. At this juncture, players should watch the trend and trade wisely in the midst of seemingly a markup phase and buying sentiment in some sectors and profit taking in others on a daily time frame. Also, trading volume pattern continues to oscillate, suggesting smart money are gradually taking profit amid revaluation of the market and short-term opportunities, looking at economic events in the face of policy direction of the government that look inconsistent and global economic outlook in the face of easing trade war and geopolitical tension.
To navigate the rest of Q2 and beyond profitably, it is important to run with economic events, fundamental and technical analysis, join investdata live sessions at noon every Monday, Wednesday and Friday’s trading session “and also get investdata technical toolbox to play the current state of the market do suggest that discerning investors are gradually becoming greedy, while others are fearful, as seen in the recent pullbacks. Despite the oscillating volume of transaction witnessed in recent time, it is time to position in undervalued stocks, sectors and the next insider playing opportunity.
Oil prices on Tuesday inched higher to continue its oscillation, as it trades at $67.46 per barrel, in the midst of US and China concluding their two-day trade negotiation meeting in London. Even as OPEC goes front and back on increasing production or cut output. As soft macroeconomic data emanating from US and China remain a concern for players. Even as US-Russia peace talk and ceasefire in Ukraine continued to shake. The trade tariffs negotiations seem to have fallout to signal global recession and weak economic activities, just as geopolitical tensions across many economies remain a major source of concern to the global economy and energy consumption in 2025. This trend may likely continue, while the up and down movement continues to drive volatility.
Tuesday’s trading opened in the upside and it was sustained throughout the session, despite oscillating profit taking on some stocks and buying interest on others. This situation pushed the NGX’s index to intra-day high of 115,327.60bps from its lows of 114.603.48bps, before closing above its opening level at 114,820.86bps.
Market technicals were positive and mixed with lower volume when compared to previous session in the midst of breadth that favours the bulls on a selling sentiment as revealed by Investdata’s Sentiments Report showing 30% buy position and 70% sell volume. The total transaction volume index stood at 1.06points, just as impetus behind the day’s performance was relatively strong, as Money Flow Index was inched up to read 62.59pts, from the previous day’s 61.89pts, indicating that funds entered the market.
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Index and Market Caps
The benchmark NGXASI at the end of Tuesday’s trading gained 204.11 basis points, closing at 114,820.86bps from 114,616.75bps, representing a 0.18% up, while market capitalization rose by N128.72bn to close at N72.40tr from the previous day’s N72.21tr, representing a 0.18% value gain.
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Tuesday’s upturn was driven by position taking in the shares of Berger Paints, Oando, Etranzact, International Breweries, May/Baker, Omatek and Legend Internet, among others, which impacted positively on Year-To-Date gain which inched up to 11.56% while Market capitalization gain stood at N14.57tr, representing 14.57% increase over its opening level for the year.
Mixed Sector Indices
Sectoral performance indexes were mixed, as the NGX Consumer Goods and Banking indexes closed higher by 2.56% and 0.27% respectively, while the NGX Energy index led the decliners, gaining 2.84% followed by Insurance and Industrial goods with 0.60% and 0.14% respectively.
Market breadth was positive as gainers outnumbered losers in the ratio of 37:27, while activities in volume and value were down, after investors exchanged 652.64m shares worth N18.88bn, with volume driven by trades in Accesscorp, Zenith Bank, GTCO, Fidelity Bank and Wapic.
Berger Paints and Daarcom were the best performing stocks, gaining 10% each, closing at N22.55 and N0.66per share respectively on the back of sentiment and market forces. On the flip side,RT Briscoe and John Holt lost 10% and 9.87% respectively, closing at N2.25and N6.85 per share, purely on selloffs and profit taking.
Market Outlook
We expect mixed sentiments on candlestick formation that signals profit taking and pullback, as investors buy into value in expectation of audited corporate earnings of March year end and others in the midst of portfolio reshuffling, even as few audited accounts are expected to hit the market with dividend announcement.
Also, sector rotation and portfolio rebalancing continued in the market with investors taking advantage of price correction to buy into value.
This is amid the volatility and pullbacks that add more strength to upside potential. Consequently, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically.
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The NGX 2025 market volatility has continued to create wealth for smart traders and discerning investors who took action, or are ready to take action. If you have been wondering:
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CRO|Investdata Consulting Ltd
ambrose.o@investdataonline.com
Tel: 08028164085, 08179547605
