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An analyst at Pepperstone Markets Limited has said the Nigerian equity market faces continued pressure, with the NGX All Share Index dropping 0.5% at the close of trading on Wednesday, nearing the key support level of 106,000 points.

In a market note, Daniel Wesonga, Senior Sales Manager at Pepperstone, said the market remains negative overall, as only 2 of the 19 sectors closed in the positive territory. Technology, commercial services, and tech services were the weakest performers, down 5.11%, 2.92%, and 2.28%, respectively. However, the transportation sector showed resilience, rising by 1%, while blue-chip stocks like Dangote Cement, Bua Foods, Bua Cement, and Aradel ended flat.

“The underperformance in several sectors, particularly technology, suggests cautious investor sentiment and continued volatility ahead,” noted Wesonga.

He observed that the government is focusing on the oil and gas sector to help the country achieve its 5% GDP growth target by 2027. While GDP growth is projected at 3.84% in 2024, with estimates ranging from 3.6% to 4.1%, increasing oil production remains critical for the country.

“Oil continues to be a key driver of foreign exchange and infrastructure development,” said Wesonga. “This initiative could support growth in the sector, strengthening confidence in energy stocks and potentially providing momentum for the broader domestic equity market. However, risks remain if production targets are not met, or global prices fluctuate.

“Additionally, President Bola Tinubu’s focus on building a globally competitive banking system, highlighted by the First Bank’s new headquarters, underscores his ambition for economic transformation. Strengthening financial institutions could spark investor interest and provide long-term support for the domestic equity market,” he concluded.