Improved corporate earnings and declining yields in the fixed-income market have continued to trigger positive sentiment in the equities segment of the Nigerian Exchange Limited (NGX), with investors’ wealth rising by N1.8 trillion.

Last week, the all-share index (ASI), which measures the performance of listed companies, rose by 2.2 per cent on a week-on-week basis to close at 134,452.93 points. This uptick signifies a resurgence in investor appetite and broad-based optimism, which was evident across various sectors of the market.

Also, the market capitalisation gained N1.8 trillion, or 2.2 per cent, to settle at N85.06 trillion, pushing the year-to-date return to 30.63 per cent. The positive momentum was further underscored by a market breadth of 1.40x, as 60 stocks posted gains against 43 that declined, surpassing the previous week’s tally by one.

Analysts attributed the strong rally in equities to the sharp drop in treasury bill yields observed at the mid-week primary market auction, a development largely driven by expectations of an interest rate cut.

The Monetary Policy Committee’s (MPC) decision to maintain all policy parameters unchanged further encouraged investors to reassess their portfolios in favour of equities, where returns are relatively more attractive under the current macroeconomic environment.

Despite the bullish sentiment, overall market activity was subdued, as both trade volume and value recorded steep declines. Total volume of transactions fell by 78.9 per cent to 3.68 billion units, while the value of trades dropped by 77.6 per cent to N111.90 billion, compared to 17.49 billion units and N500.8 billion recorded in the preceding week.

Analysts noted that this sharp contraction in turnover likely reflects a period of cautious recalibration by institutional investors and fund managers ahead of typical month-end adjustments.

On the sectoral front, performance was overwhelmingly positive, with all six major indices closing in the green. The NGX Industrial and NGX Insurance indices led the rally, notching up gains of 4.66 per cent and 3.07 per cent respectively, on the back of impressive price movements in stocks such as International Energy Insurance, Sovereign Insurance, Julius Berger, Lafarge Africa and BUA Cement.

The NGX consumer goods Index also posted a notable gain of 2.81 per cent, while the NGX Commodity Index rose by 2.24 per cent. The NGX Banking and NGX Oil & Gas indices advanced by 1.84 per cent and 0.87 per cent respectively, supported by buying interest in Wema Bank, Oando, Presco, Dangote Sugar, Guinness and Okomu Oil.

Analysts have expressed optimistic outlooks on the equities market as the new week begins, citing enhanced corporate earnings reports, central bank policy shifts, and declining yields in the fixed-income market as key drivers.

According to analysts at Cowry Asset Management Company, the market is expected to post a mixed performance in the days ahead, influenced largely by the ongoing release of second-quarter earnings results and the usual end-of-month portfolio rebalancing by institutional investors.

While they acknowledged that bouts of profit-taking may emerge, Cowry noted that investor sentiment is likely to remain tilted in favour of fundamentally sound stocks.

They added that the recent decision of the Monetary Policy Committee (MPC) and evolving yield patterns across asset classes are also likely to influence market direction.

“As always, we advise investors to maintain exposure to high-quality stocks with strong fundamentals and consistent dividend outlook,” the firm stated.

Similarly, analysts at Cordros Capital observed that the formal commencement of the half-year 2025 earnings season will be a significant sentiment driver in the near term. They noted that lower stop rates recorded at recent auctions could trigger a gradual reallocation of funds into the equities market.

“With lower stop rates at auctions, we anticipate a gradual rotation into equities as investors reposition for improved risk-adjusted returns amid declining fixed-income yields,” Cordros stated.

Vetiva Dealings and Brokerage also maintained a bullish outlook for the short term, citing prevailing optimism over corporate earnings and sliding rates in the secondary market. The firm expects these factors to guide market movements at the beginning of the week.

“The market should remain bullish in the near term, as sliding rates in the secondary market and optimism over improved Q2 2025 earnings are expected to shape market direction on Monday (today),” Vetiva said.