Resurgent worries about rising U.S. bond yields hit U.S stocks heavily at its most recent trading session. global investors are currently waiting anxiously on what the most powerful monetary policymaker, Jerome Powell will say on the risk of a rapid rise in long-term borrowing costs.

The fear of higher U.S. bond yields undermined riskier assets like U.S stocks and other global equities.

Stock traders are treading cautiously on a macro that revealed the Benchmark 10-year U.S. Treasuries surged to 1.477% as investors anticipate U.S. inflation could pick up as economic recovery gathers momentum driven by government stimulus and further progress in the rollout of COVID-19 vaccines.

Stock bears took a grip on the world’s biggest and most liquid equity markets as Healthcare, Technology, and Consumer Services sectors drifted lower

• At the close in New York Stock Exchange, the Dow Jones Industrial Average plunged by 0.39%, while the S&P 500 index lost about 1.31%, and the NASDAQ Composite index dipped by 2.70%
• Stocks that recorded significant losses outnumbered advancing ones on the New York Stock Exchange by 1717 to 1512 and 67 ended unchanged; on the Nasdaq Stock Exchange, 2152 fell and 1175 advanced, while 57 ended unchanged.

Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics spoke on the rationality behind the recent sell-offs observed in U.S equity markets

Innes said, “The sell-off in global fixed income markets is revving up again, spilling over to unseat equities and other relatively heavily positioned risk-sensitive assets.

“Chicago Federal Reserve Bank, President Evans today did not push back on the rise in yields. He said he does not see a risk of inflation rising too quickly and does not think the Fed will need to change the duration of QE purchases.

“To my mind, the only thing left that might influence the Fed’s decision-making process would be whether financial conditions were to tighten or markets were deemed dysfunctional.”

What to expect: That being said, some stock market experts however share the opinion that it seems too early to raise the alarm as financial conditions seem loose, Fed intervention’s hurdle is high and will be higher always when activity and inflation data come in very strong through Q2.

Nigerian bourse ended the mid-week trading session on a bearish note. The All Share Index plunged by 0.44% to close at 39,697.62 index points as against the -0.59% drop observed on Tuesday its Year-to-Date (YTD) returns currently stands at -1.86%.

Investors’ losses on Wednesday stood at N91.86 billion. The Nigerian Stock Exchange market capitalization stood at N20.7 billion

The market turnover closed positive as volume moved up by +9.78% as against the -59.08% downtick recorded in the previous session. ZENITHBANK, GUARANTY, and UCAP were the most active to boost market turnover.

The market breadth closed negative as SEPLAT led 16 Gainers as against 29 Losers topped by JAPAULOIL at the end of today’s session – an unimproved performance when compared with the previous outlook.

Top gainers

1. SEPLAT up 10.00% to close at N583
2. AIICO up 5.22% to close at N1.21
3. CORNERST up 5.17% to close at N0.61
4. UAC-PROP up 5.00% to close at N0.84
5. CUTIX up 4.21% to close at N2.23

Top losers

1. JAPAULGOLD down 10.00% to close at N0.54
2. NEM down 9.91% to close at N1.91
3. CHAMPION down 9.76% to close at N1.85
4. NPFMCRFBK down 9.47% to close at N1.72
5. LINKASSURE down 8.93% to close at N0.51

Outlook

Nigerian stocks ended the mid-week trading session of the week on a negative note amid soaring oil prices prevailing at the U.S trading session.

• Downtrend was driven by price depreciation medium and small capitalized stocks amongst which are; NEM, JAPAUL GOLD, CHAMPION.
• Nairametrics expects intending buyers to seek the advice of certified stockbrokers.