Nigerian stocks in biggest year-to-date fall after interest rate increase

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The all-share index shrank by 961.9 points to 51,949.6, while market capitalisation closed lower at N28 trillion.

Nigerian stocks fell by as much as 1.8 per cent, its sharpest fall since the beginning of the year, after the central bank’s monetary policy team took a hawkish stance,The move could heighten the pressure on equities considerably in the near term as the promise of improved yields could lure portfolio managers into selling big volumes of stocks and investing the proceeds in fixed income instruments.

Increasing interest rate is often effective in fighting inflation driven by higher demand, not in tackling inflation induced by high costs and supply chain disruptions,UACN, MTN Nigeria and GTCO set the slide in motion, while the Consumer Goods Index took the heaviest hit of the five sector indexes tracked by the index.

MRS rose to N16.40, notching up 9.70 per cent in the process. Abbey Building Society added 9.09 per cent to end trade at N1.80. Academy completed the top 5, climbing by 8.15 per cent to N1.46.Guinness was the worst performing stock, declining by 10 per cent to close at N88.20. Global Sectrum Energy shed 9.77 per cent to close at N2.77.

 

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