Strong Momentum Persists As NGX Crosses140,000 Psychological Line Amid Better ThanExpected Earnings, Blue-Chip Demand

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The Nigerian stock market extended its bull­ish trend throughout the month of July, af­ter recording straight 21 trading sessions of bull ascendance that were buoyed by strong corporate earnings and investor confidence.

As position taking heavyweights stocks and blue-chip companies weighed on the key performance indicators to closed higher for the month and week.

Despite, the seeming profit taking in some of the stocks that recently rallied on sentiment rather than fundamentals.

NGX All-Share Index recorded 16.56% and 5.07% gain for July and the week respectively, following price appreciation of stocks in different classes, which pushed the index action to breakout vari­ous psychological lines on a huge traded volume for the respective periods to revealed overbought state of NGX in a very high volatile trend that sends mixed signal of panic selloff or early exit of win­ning trades.

At the current stage of the market, it is easy to get caught up in a market like this where momentum is strong and breakouts everywhere.

Even some of the weakest and bad stocks are on the rise.

But, if you have followed Investdata all these years and months, you should know how these sto­ries and movement tend to end, especially when fun­damentals are ignored and risk gets brushed aside.

Price is king as we have always said but it can equally fool everyone, if care is not taking or apply, because all eyes are on price or index action.

Price is the last thing to move, what move first is what Investdata call Money Flow, when you can track every naira and kobo flowing into and out of a particular stock or sector in real time, you can spot reversals and continuations of trend before they happen.

During the week, market capitalisation surged by N3.91trn to N89.37trn, while year-to-date return increased from 37.25%. As several stocks hit new 52-week highs, including ROYALEX, UACN, BETA­GLAS and others.

Sentiment was largely positive early in the week, though it dipped by Friday with more losers than gainers. Trading volumes fluctuated, peaking at 1.11billion units, with FIDELITYBK leading in vol­ume and MTNN in value.

NGXASI Weekly Chart

Week-to-date, the All-Share Index has advanced by 5.07%, with the NGX 30 rising 5.13%.

The Banking Index posted a gain of 3.49%, the Pension Index climbed 4.37%, the Insurance Index fell by 1.22 %, and the Consumer Goods Index added 2.72%. Oil and Gas Index decreased by 0.48%.

NGXASI Monthly Chart

On a year-to-date basis, the All-Share Index is up 37.25%, while the NGX 30 has gained 36.03%.

The Banking Index surged 49.27%, the Pension Index jumped 52.94%, the Insurance Index rose 23.53%, and the Consumer Goods Index posted a robust 71.89% increase.

However, the Oil and Gas Index declined by 10.16%. Market breadth remained positive, with 54 stocks advanced and 49 declined.

Market Outlook & Caution:

The market remains technically strong, with the NGX All-Share Index breaking through key psycho­logical levels and trending well above its 20- and 50-day moving averages.

Relative Strength Index (RSI) readings on key stocks suggest the broader market is approaching overbought territory, especially among high-flyers like UACN and DANGSUGAR.

While short-term corrections are possible, espe­cially as earnings season winds down for structur­al factors like sector rotation into fundamentally solid companies, continued retail and institutional demand, and improving earnings outlooks could support the next leg of the rally.

Caution:

Profit-taking and macro risks such as inflation, forex instability, and fiscal tightening could intro­duce near-term volatility, particularly in underper­forming sectors like Oil & Gas and Insurance

UACN Weekly Chart

Leading the top gainers charts is; UACN Plc, a diversified company involved in key sectors of the Nigerian economy, including packaged food and beverages, paints, animal feeds, and quick-service restaurants,which opened at N54.95 and closed at N88.30, gaining N33.35 or 60.69%.

Mecure Industries Plc rose from N11.20 to N15.85, adding N4.65 or 41.52%, while Custodian Investment Plc appreciated by N8.50 or 27.87% to close at N39.00 from N30.50. Veritas Kapital Assurance Plc moved from N1.13 to N1.39, up by N0.26 or 23.01%, and Trip­ple Gee and Company Plc climbed from N3.51 to N4.30, adding N0.79 or 22.51%.

Abbey Mortgage Bank Weekly Chart

On the decliners’ side, Abbey Mortgage Bank, a Nigerian primary mortgage bank headquartered in Lagos, operating under a license from the Central Bank of Nigeria since 1992, dropped by N2.73 or 34.13% from N8.00 to N5.27.

The S&P 500 lost 101.38 points or 1.60% to close at 6,238.01, marking its worst day since May 21. The Nasdaq Composite slid 472.32 points or 2.24% to end the day at 20,650.13, its steepest fall since April 21. Earlier in Europe, the pan-European STOXX 600 index ended down 1.89%, its worst performance since April 9.

Amazon shares tumbled over 8% after its earnings report revealed slower-than-expected growth in its cloud business, adding to broader market concerns.

The global risk-off sentiment intensified following Trump’s announcement of sweeping new tariffs on several trading partners.

He raised tariffs on all Canadian imports not covered by the USMCA to 35% from 25%, imposed a 25% tariff on Indian exports, 20% on Taiwan’s, 19% on Thailand’s, and 15% on South Korean goods. Mexico was given a 90-day reprieve to negotiate terms and avoid immedi­ate tariff hikes.

In the currency markets, the dollar reversed earlier gains and dropped sharply as expecta­tions for monetary easing grew.

The dollar index fell 1.37% to 98.66. The euro rose 1.52% to $1.1589, while the dollar fell 2.26% against the Japanese yen to 147.32. Market an­alyst Juan Perez of Monex USA said the dual news of Kugler’s resignation and McEntarfer’s firing would be interpreted as “very dollar-neg­ative,” warning that any erosion of Fed inde­pendence could lead to further dollar declines.

U.S. Treasury yields plunged amid the weak jobs report and heightened rate cut expecta­tions.

The benchmark 10-year yield fell 14 basis points to 4.22% from 4.36% the day before. The 30-year bond yield dropped 6.4 basis points to 4.8211%, while the 2-year note yield—sensitive to Fed policy—sank 26.1 basis points to 3.69%.

Commodities also reacted sharply. U.S. crude fell $1.93 or 2.79% to settle at $67.33 a barrel, while Brent crude dropped $2.03 or 2.83% to $69.67, as investors weighed weaker economic signals and a potential output hike by OPEC+.

Gold surged as investors sought safe-hav­en assets, with spot prices climbing 2.14% to $3,360.45 an ounce, hitting a one-week high.

Sectorial Charts For the Week

NGX Banking Index Chart

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