Blood bath in global equities on soaring inflation as NGX gains N511.8bn

As the world battles rising inflation, with equities looking southwards, the Nigerian equities market appears to be nonchalant towards global development, as it gained N511.8 billion in one week.

World central banks are handling the rude shock imposed on it by the invasion of Ukraine by Russia with a hawkish stance, the Nigerian apex bank appears to be dovish in the face of the rumblings.

That appears to be the views of analysts at Afrinvest weekend. “The uptrend in inflation globally continued to weigh on market and consumer sentiments, strengthening the case for hawkish stance.

“In the US, the Fed reiterated its bias for aggressive monetary tightening and affirmed that a half-percentage point increase is eminent in May to tame spiralling inflation”, said Afrinvest.

Although the market anticipated a deviation from the usual 25 basis points (bps) hikes, investors’ sentiment remained dampened and resulted in a blood bath in the global equities market.

But in our domestic equities market, improved sentiment is driving gains, as the All Share Index (ASI) went up by 1.9 per cent week-on-week ( w/w).

“The local bourse extended its positive run for the second straight week as the NGX All-Share Index rose 1.9 per cent w/w to settle at 48,459.65 points”, said analysts at Afrinvest.

Accordingly, Year-to-Date (YTD) returns improved to 13.4 per cent (previously 11.3 per cent) while market capitalisation rose by N511.8 billion w/w to reach N26.1 trillion.

Activity level was mixed as the average volume rose 4.4 per cent w/w to 325.4m units while the average value traded fell 20.4 per cent w/w to N4.5 billion.

At the foreign exchange market, after surpassing the $111 per barrel (bbl.) mark on Monday, oil prices fell sharply by 4.7 per cent to $106.63/bbl. on Tuesday due to fears of weakened demand as the International Monetary Fund (IMF) cuts its global economic growth forecast.