The Nigerian stock market has suffered a sharp downturn, losing over N550 billion in value within a week due to escalating global trade tensions triggered by the U.S. President Donald Trump’s tariff policies. The Nigerian Exchange Limited (NGX) recorded its steepest losses in months, with the All-Share Index (ASI) dropping 1.23 per cent on Monday alone, marking a significant decline from 105,511.89 points to 104,216.87 points
Overall, the stock market decreased by 0.90 per cent or about N559billion in the trading week ended Friday April, 11 following three days of negative closes as against two days of positives.
Profit taking in insurance and banking stocks pushed the market lower in the review week.
Muted institutional investors’ interest in banking, insurance stocks caused the market momentum to decrease.
NGX Insurance Index decreased most by 4.57 percent in the review week, followed by NGX Banking Index which was down by 2.20 percent, while NGX Consumer Goods Index decreased by 0.61 per cent, NGX Industrial Index (-0.26 per cent), and NGX Oil & Gas Index (-0.50 per cent).
This month, the market has decreased by 1.04 percent, while this year’s return moderated to +1.59 per cent.
The Nigerian Exchange Limited (NGX) All-Share Index (ASI) and equities market capitalisation which started the review week at 105,511.89 points and N66.147 trillion respectively decreased to 104,563.34 points and N65.706 trillion.
Overall market sentiment was influenced by flows into dividend-paying stocks as investors positioned ahead of upcoming qualification dates.
Recall that the director-general (DG) of the World Trade Organisation (WTO), Ngozi Okonjo-Iweala, on Thursday, said the United States and China’s trade war could reduce global gross domestic product (GDP) by 7 percent.
On Wednesday, United States President Donald Trump raised China’s tariff rates from 104 percent to 125 percent and paused tariffs for dozens of other countries.
In a statement on Wednesday, Okonjo-Iweala said the US and China accounted for three percent of world trade combined.
She said the escalating trade war between the two economic giants could slash trade between both countries by up to 80 percent.
The DG warned that the conflict could severely damage the global economic outlook.
“The escalating trade tensions between the United States and China pose a significant risk of a sharp contraction in bilateral trade,” she said.
“Our preliminary projections suggest that merchandise trade between these two economies could decrease by as much as 80 per cent.
“This tit-for-tat approach between the world’s two largest economies — whose bilateral trade accounts for roughly three per cent of global trade — carries wider implications that could severely damage the global economic outlook.
“Our assessments, informed by the latest developments, highlight the substantial risks associated with further escalation.
“The negative macroeconomic effects will not be confined to the United States and China but will extend to other economies, especially the least developed nations.
“Of particular concern is the potential fragmentation of global trade along geopolitical lines.
“A division of the global economy into two blocs could lead to a long-term reduction in global real GDP by nearly seven per cent.”
The WTO DG further said that trade diversion remains an immediate and pressing threat, one that requires a coordinated global response.
“We urge all WTO members to address this challenge through cooperation and dialogue,” she said.
“It is critical for the global community to work together to preserve the openness of the international trading system.
“WTO members have the agency to protect the open, rules-based trading system.
“The WTO serves as a vital platform for dialogue. Resolving these issues within a cooperative framework is essential.”
On April 4, Okonjo-Iweala said the recent tariffs announced by the US will have significant implications for global trade and economic growth prospects.
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