The Nigerian Exchange (NGX) recorded a sharp downturn last week as investors lost N5.64 trillion in market value following widespread profit-taking and weakening investor sentiment across key sectors.
The decline reversed the recent bullish trend that had pushed the market to record highs, as the All-Share Index fell by 3.59 per cent week-on-week, closing at 235,941.27 points compared to 244,738.74 points at the start of the week.
Market capitalisation also dropped significantly to N151.33 trillion, reflecting heavy sell-offs across banking, consumer goods and other major sectors.
Analysts attributed the decline largely to portfolio rebalancing by investors who had earlier recorded strong gains, as well as a shift toward fixed-income instruments offering higher yields amid tight liquidity conditions and macroeconomic uncertainties.
Speaking on the development, analysts noted that the correction was expected after months of sustained rally in equities, particularly in the banking and consumer goods sectors.
According to a financial expert, the decline represents a normal market adjustment rather than a long-term reversal, stressing that profit-taking was inevitable after prolonged gains.
“The market had experienced strong bullish momentum, so some level of correction was expected. This helps to stabilise valuations and create new entry opportunities,” the analyst said.
Another market commentator explained that rising interest rates and attractive returns in fixed-income securities had encouraged institutional investors to reduce exposure to equities.
Trading data showed a highly negative market breadth, with 78 stocks declining compared to just 11 gainers, indicating broad-based bearish sentiment across the market.
Although trading volume fell by 38.04 per cent, transaction value rose, suggesting selective buying and strategic repositioning by investors rather than a total exit from equities.
The financial services sector remained the most active, accounting for the largest share of traded volume and value, followed by the services and consumer goods sectors. Access Holdings, Sterling Financial Holdings, and Jaiz Bank were among the most actively traded stocks during the week.
Despite the downturn, analysts maintain that the market’s long-term outlook remains positive, especially if corporate earnings remain strong and macroeconomic conditions improve. They also noted that the current correction could present attractive buying opportunities for long-term investors.
