After months of consistent growth, the Nigerian Exchange Limited (NGX) experienced a significant break in August, losing a staggering N604 billion in market capitalisation.

This sharp decline contrasts with the optimism and upward trajectory that had defined the market for much of the year.

The market capitalisation declined by N604 billion, from N89.373 billion recorded as of Friday, August 1. The market closed last Friday at N88.769 trillion.

Additionally, the all-share index (ASI) declined by 967.55 points, or 0.7 percent, to 140,292.95 points from 141,263.05 points.

In July 2025, the market delivered one of its most impressive performances in recent years, with investors recording the year’s highest rally.

According to data from the NGX, the total market capitalisation of listed equities rose from N75.951 trillion at the close of trading on June 30, 2025, to N88.424 trillion by the end of July, representing a N12.5 trillion or 14 per cent month-on-month gain.

This was one of the largest single-month gains in recent years, highlighting the full return of bulls across key sectors.

The July performance was buoyed by strong earnings results, increased foreign portfolio participation, and renewed confidence in key sectors. Equities soared, resulting in considerable capital gains across the board.

The bullish sentiment that prevailed in July helped to push both the market capitalisation and the all-share index to new highs, setting a tone of optimism and elevated expectations heading into August.

While the earlier months had seen a steady rise in stock values, driven by investor confidence and positive economic indicators, August’s performance raised the alarm bells, leaving investors, analysts and market participants guessing the next market move.

The downturn was felt across almost every sector, each facing its own unique challenges. The industrial goods sector, a heavyweight in terms of market influence, experienced the most severe correction over the month.

Driven largely by steep selloffs in cement manufacturing giants such as Dangote Cement and BUA Cement, the sector’s index plunged by approximately 8.42 percent. These losses were compounded by currency instability and rising input costs, both of which weighed heavily on investor sentiment toward capital-intensive industries.

The insurance sector also closed the month in negative territory, surrendering much of the gains it had posted earlier in August. After a strong mid-month rally that had seen insurance stocks surge as high as 40 percent in some cases, the sector cooled significantly.

By the end of the month, the NGX Insurance Index had dropped by 4.17 percent. This pullback reflected profit-taking by investors as well as broader market fatigue, especially in a sector that had been buoyed more by momentum than by earnings fundamentals.

Similarly, the banking sector, which had shown mixed performance during the early part of the month, ended August with a noticeable downturn. The NGX Banking Index closed the period with a 3.48 percent decline.

Contributing factors included tighter monetary conditions, rising yields in fixed income markets, and caution over non-performing loan exposures. While banking equities continue to attract institutional interest, the mood shifted noticeably by month-end.

The oil and gas sector fared slightly better but still closed lower, reflecting a marginal retreat in sentiment. The index dropped by approximately 0.84 percent during the month, underscoring investor hesitancy amid global oil price fluctuations and domestic policy uncertainty.

While companies like Oando had posted outsized gains earlier in the month, by the end of August, enthusiasm had waned, resulting in a sector-wide pullback.

In contrast to the general bearish mood, the consumer goods sector demonstrated resilience. As one of the few areas of the market that managed to hold firm, the NGX Consumer Goods Index rose by about 0.83 percent over the course of the month. This modest gain positioned the sector as a defensive stronghold for investors seeking shelter from volatility.

An independent investor, Amaechi Egbo, described the drop as a natural market correction, arguing that after several months of positive performance, the market was due for a pullback.

He pointed out that the losses are part of the cyclical nature of stock markets, with the expectation that the market could rebound in the coming months as economic conditions stabilise.

He noted that the N604 billion loss in market value during August serves as a stark reminder of the inherent volatility of the Nigerian stock market.

Egbo added that despite months of optimism, this downturn highlights the vulnerability of emerging markets, where global and domestic factors are often inextricably linked.
Many investors have become more risk-averse, shifting away from sectors that have been hit hardest by the economic turbulence.

The banking and consumer goods sectors, which are often viewed as safer bets, have seen a shift in investor sentiment, with many investors opting for more defensive or liquid assets.

The cautious stance adopted by the market in August is a clear reflection of the growing uncertainty, both in Nigeria and globally.