Stock market edges higher amid surge in crude oil prices

·Investors may shift to energy related equities- Analysts

By Peter Egwuatu

The Nigerian stock market closed higher Week-on-Week, WoW, recording gains in four of the five trading sessions, amid rise in crude oil prices.

Breakdown of the market shows that investors continued to accumulate fundamentally strong stocks across major sectors.

The bargain hunting by market participants took advantage of recent price corrections to rebuild positions in blue-chip and mid-cap equities.

Precisely, buying interest in Dangote Cement, which went up by 4.6%, MTN 4.0%, BUA Cement 2.7%, and ARADEL 9.1% drove the Nigerian Economy Limited , NGX, All Share Index, ASI higher by 2.14% WoW, to close at 196,968.15 points from 192,826.78 points the previous week.

On trading activity, trading volume and value declined by 32.7% WoW and 31.7%, respectively. Across sectors, performance was mixed, as Oil & Gas Index grew by 9.4%, Industrial Goods Index 3.9% and Banking Index 0.2%, while the Insurance Index declined by -1.9% and Consumer Goods Index -0.1%.

Meanwhile, developments in the global oil market continued to influence investor sentiment last week. Crude oil prices extended their rally, rising more than three percent as escalating geopolitical tensions in the Middle East disrupted supply routes and heightened concerns over global crude availability. Brent crude climbed to about $84 per barrel, marking its fifth consecutive day of gains, while U.S. West Texas Intermediate crude rose to around $78 per barrel. The surge in prices reflects tightening supply conditions driven by attacks on oil tankers and disruptions to refinery operations in parts of the Middle East, China, and India.

In their projection for the week, analysts at Cordros Capital said: “This week, we expect cautious trading as investors lock in gains from recent market advances while closely monitoring geopolitical developments.

‘‘Over the medium term, market direction is likely to be shaped by macroeconomic trends, Q1-26 earnings releases, corporate actions, and the durability of both foreign and domestic investor flows.”

Commenting as well, analysts at InvestData Consulting Limited, stated: “ For Nigeria, the sustained rise in crude oil prices could provide a positive boost to government revenue and foreign exchange inflows, given the country’s heavy reliance on oil exports. “Higher oil prices may also strengthen investor sentiment toward energy-related equities listed on the Nigerian Exchange.

“Looking ahead, the market may continue to experience mixed trading sessions as investors balance profit-taking with fresh accumulation. Nonetheless, sustained institutional demand, improved earnings expectations, and supportive global oil prices could continue to provide a favourable backdrop for the Nigerian equities market”, the analysts noted.