Following a week marked by sharp swings in market sentiment, trading on the Nigerian Exchange Limited (NGX) this new week will open on a cautious but potentially volatile note, driven by inconsistent liquidity flows, shifting investor confidence, and sector-specific momentum.
News.ng reports that last week’s sessions alternated between heavy selloffs and strong rebounds, reflecting indecision among investors navigating economic uncertainty and profit-taking pressures.
Market watchers forecast a tepid start to the week, with Monday’s activity expected to mirror the mixed trend seen at the beginning of last week, when traded volume fell by 31%, turnover dropped by 26%, and only 13 stocks advanced out of 130. Analysts say the cautious tone may persist as institutional investors reassess their positions after recent swings.
While market capitalisation stood at ₦94.5 trillion last Monday, brief sell pressure is expected as weak sentiment from small-cap counters—where 42 stocks declined—lingers into the new week.
Analysts, however, expect a rebound around mid-week, mirroring last Wednesday’s strong resurgence, when the NGX posted a 23% jump in traded volume and a 73% surge in turnover, pushing market capitalisation to ₦93.4 trillion.
Large-cap banking and industrial stocks are projected to lead any mid-week recovery, buoyed by the strong performance of bellwether stocks such as GTCO, Zenith Bank, Nigerian Breweries, and Oando—all of which recorded 10% gains during last Wednesday’s rally.
If liquidity strengthens as expected, mid-week trades could show increased buying interest, particularly from institutional portfolios rotating back into fundamentally sound blue-chip stocks.
Towards the end of the week, renewed volatility is expected, similar to Thursday’s sharp drop and Friday’s rebound. Thursday saw a 26% decline in volume, a 55% fall in turnover, and a dampened mood across the market, before Friday delivered higher volume (+12%) and increased deal activity (+2%), albeit with lower turnover.
Banking stocks are expected to remain major drivers of market direction, supported by last week’s strong institutional accumulation.
Insurance stocks, which dominated the gainers’ chart on Thursday and Friday, may sustain momentum, especially for counters like Custodian & Allied and Prestige Assurance.
Small-cap speculative stocks may see continued sell pressure after recording some of the deepest losses during Tuesday’s 61-stock decline.
Market analysts conclude that the week will likely swing between cautious trading and short bullish bursts driven by liquidity spikes. While bearish pressure remains visible in the broader market, the resilience of large-cap stocks could help stabilise the NGX if buy-side activity improves mid-week.
Investors are advised to track market movers closely, watch for opportunities in fundamentally strong equities, and expect choppy sessions as the NGX navigates another week of mixed trading signals.
