Cautious, Defensive Trading Mood To Persist On The Equities Market

Capital market analysts anticipated a cautious and defensive trading mood to persist in the equities market this week.

The market continued to feel the weight of intensified profit-taking. Investors are still digesting the outcome of the recent MPC meeting, where the Committee held all policy parameters constant, a decision that typically encourages portfolio reshuffling, especially with year-end approaching and a pre-election year coming into view.

On market outlook, Cowry Assets Management Limited said, “Fundamentally, the market continues to navigate a delicate balance between caution and emerging pockets of optimism. Inflationary pressures, FX volatility, and elevated borrowing costs remain key headwinds; yet, a quiet build-up of confidence is occurring in companies with strong cash flows, tighter operating controls, and diversified earnings.

“Some investors are already positioning ahead of the upcoming dividend season in Q1 2026, a trend gradually showing in select accumulation-heavy names.”

Looking into the new week, Cowry noted that “the market is likely to retain its cautious tone. Year-end profit-taking should continue to drive sentiment, but fundamentally strong and oversold stocks may attract bargain hunters seeking early entry points before momentum shifts.”

Looking ahead, Afrinvest Limited stated, “We expect a pocket of buying activities this week, owing to attractive entry prices following the recent downturn. However, bearish trend might persist owing to year-end liquidations ahead of festivities and Capital Gains Tax (CGT) implementation.”

Also, Imperial Asset Managers Limited explained that “we expect the cautious and defensive trading mood to persist in the near term as the market continues to rebalance from last week’s sell-off.

“Overall, we anticipate a range-bound market with a selective upward bias. Improving market breadth signals softening selling pressure, while bargain-hunting, especially in fundamentally strong counters in Banking, Telecoms, and mid-caps, is likely to continue.”

Meanwhile, the benchmark NGX All-Share Index (ASI) last week closed at 143,519.81 points, down 0.14 per cent week-on-week, as the market continued to feel the weight of intensified profit-taking. This cautious repositioning pushed total market capitalisation down by the same margin to N91.286 trillion, eroding N128 billion in value.

Market sentiment remained clearly weak as Market breadth closed negative with 26 gainers against 68 that closed lower. Ikeja Hotel led the gainers table by 45.08 per cent to close at N30.25 per share. NCR Nigeria followed with a gain of 32.97 per cent to close at N54.65, while UACN rose by 12.71 per cent to close at N78.90 per share.

On the other side, Meyer led the decliners table by 18.89 per cent to close at N13.10 per share. SUNU Assurance followed with a loss of 14.78 per cent to close at N3.92, while UPDC declined by 11.93 per cent to close at N5.02 per share.

Overall, a total turnover of 4.140 billion shares worth N115.889 billion in 102,351 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 2.668 billion shares valued at N106.264 billion that exchanged hands the previous week in 107,998 deals.