Nigerian index dips towards five-month low


By Gbenga Agbana with agency reports


Tuesday, 31 Aug 2010


The Nigerian Stock Exchange‘s All-share Index fell back towards five-months lowest level on Monday, after two days of gains, down by 53.35 points or 0.22 per cent to 24,221.13 points from 24,274.51, which it opened for the week.


Market capitalisation also fell by N13bn or 0.22 per cent, from N5.94tn to N5.92tn.


Blue-chip stocks led the bears, including household products maker, PZ Cussons, and Nigerian Breweries Plc, both down by more than four per cent.


The drop in indices, according to some experts, was the fallout of massive sell-offs by some banks and individuals who took money from banks to buy shares, as the deadline for banks to reduce their exposure to the capital market to 10 per cent, expires on Wednesday.


According to Reuters, the South African stocks gained more than one per cent, buoyed by last week‘s assurance from the United States Federal Reserve that it was ready to do what was needed to keep the economic recovery from stalling, while stronger metal prices bolstered miners.


The Johannesburg ‘s blue-chip top-40 index rose by 1.44 per cent, to close at 23,983.11 points and the broader All-share Index added 1.27 per cent to 27,077.34 points.


”We were not able to react to the Fed assurance statement on Friday, the reaction is only coming in this morning,” Martin Lentsoane, a trader at News Trading, says. ”Copper is up, platinum is up also, so metal prices are giving us a bit of support.”


The US Federal Reserve Chairman, Mr. Ben Bernanke, said late on Friday that the Fed was ready to take further steps, if necessary, to spur the economic recovery.


Charts also suggest that the blue-chip index has little downside momentum with its 14-day relative strength index, or RSI, at around 40, near the oversold mark of 30, while its slow stochastic index also hovered closer to its oversold mark of 20.



Source: The Punch



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