Stocks advanced in Europe and Asia on Thursday, with the focus on energy companies as speculation U.S. interest rates may not rise at all this year left the Dollar nursing hefty losses and oil held most of the previous day's big gains; Reuters reports.
In contrast, equities in Nigeria continued its ride on the downhill today as the domestic bourse closed on a negative note, to extend the losses. The NSE All Share Index depreciated by 0.38% to Close at 23,517.19 points compared to 23,605.89 points recorded in the previous session. In addition, market capitalization declined by 0.38% to close at N8,088 trillion as against N8,118 trillion recorded in the preceding session.
However, the transaction volume on the exchange increased significantly by 100.81% to close at 2,641,080,892 ordinary shares exchanged in 3,057 deals as against 1,315,182,177 ordinary shares exchanged 4,012 deals recorded in the previous trading session. In the same vein, market value increased by 28.49% to close at N3,742 billion as against N2,913 billion recorded in the previous trading session. The Banking sub sector led the volume drivers, with Wema Bank Plc being the most actively traded.
Out of a total of 88 equities that were traded, only 18 of them gained while 26 lost value. Forte Oil, Guinness and International Breweries were the top gainers with N26.50k, N5.58k and N1.73k gain per share to close at N310.00k, N122.34k and N19.55k respectively. Nestle, 7UP and Dangote Cement lost N37.00k, N177.61k and N2.70k per share to close at N703.00k, N177.61k, and N124.30k respectively.
All NSE Sectorial Indices closed in the red territory, except the NSE Oil/gas Index, NSE Banking Index and NSE Insurance Index which posted a gain of 4.54%, 1.07% and 0.25% respectively. The NSE Lotus Islamic Index posted the highest sectorial loss of 2.17%, followed by NSE Consumer Goods Index and NSE Industrial Index which went down by 1.54% and 1.12% respectively. Similarly, the NSE 30 Index decreased by 0.18%
U.S. stock futures SPc1 pointed to a higher open on the Wall Street as well. The dollar fell sharply on Wednesday after weak U.S. data and comments from a Fed policymaker interpreted as signaling further rate hikes could be delayed. The U.S. currency fell 0.7 percent against a basket of its peers .DXY on Thursday and was on track for its deepest weekly fall since mid 2009. It hit a 3-1/2 month low against the euro and held close to its weakest for a week against the Japanese yen.
"The dollar is on its knees," said Richard Benson, head of portfolio management with currency fund Millennium in London. "Probably we will now have some stability ahead of U.S. payrolls tomorrow." Dollar weakness, and unconfirmed talk that oil-producing countries in and outside the OPEC group may meet soon to discuss output cuts, helped crude prices add to Wednesday's sharp gains.
Brent, the global benchmark LCOc1, was up 35 cents at $35.39 a barrel, having fallen as low as $27.10 in mid-January. Commodity-related shares pushed higher in Europe. The pan-European FTSEurofirst 300 index .FTEU3 rose 0.6 percent while the STOXX Europe 600 Basic Resources Index .SXPP gained 4.9 percent and oil and gas index .SXEP 3.2 percent.
Shares in Anglo American (AAL.L), Glencore (GLEN.L), BHP Billiton (BLT.L) and BP (BP.L) rose 3.5 to 11 percent. Britain's miner-heavy FTSE 100 index .FTSE rose 1.4 percent. On the debit side, Swiss bank Credit Suisse (CSGN.VX) slid 10 percent after posting its first full-year loss since 2008. "Now we see that the U.S. dollar has broken down quite significantly and based on the cross-asset correlation, that certainly helps commodity prices and stocks," said Gerhard Schwarz, head of equity strategy at Baader Bank in Munich.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS jumped 2.3 percent. Australia's resource-rich index rose 2.2 percent. Tokyo's Nikkei N225 fell 0.9 percent, pressured by a stronger yen, which harms exporters, and by weak earnings forecasts from leading companies. Chinese shares gained, with the CSI300 .CSI300 index closing 1.2 percent higher as the weaker dollar eased concerns of a sharp near-term depreciation in the yuan currency.
Stocks globally have had a rough start to 2016, hurt by tepid U.S. growth, falling oil prices, and concern the world faces a China-led slowdown. But another potential worry — that the U.S. Federal Reserve would keep raising interest rates throughout 2016 — has receded somewhat.
Fed policymaker William Dudley told Market News International in an interview published on Wednesday that monetary conditions had tightened since the Fed raised rates on Dec. 3. and that rate-setters would have to take this into account. Investors interpreted this as meaning future rate rises might be delayed. The federal fund futures market FFZ6 indicates traders no longer expect a Fed hike this year.
Stock market strength lessened the appeal of low-risk, low-reward government debt. Yields on German 10-year Bunds DE10YT=TWEB, the euro zone benchmark for borrowing costs, rose 4 basis points to 0.32 percent.
Ten-year U.S. Treasury yields US10YT=RR edged up 2 basis point to 1.90 percent.
"The pressure from oil is easing…and tranquillity is returning to other markets so we can expect a bit of a step back from bonds, and yields should trend higher," KBC strategist Piet Lammens said.
The revised U.S. rate outlook lifted gold XAU=, which hit a three-month high at $1,147.40 an ounce.
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