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Stock extends gains as sell-off seen overdone

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Stocks rose more than two percent in early trade on Monday on the view that last week’s dip to a more than six-month low on weaker oil prices and faltering growth was overdone.

Nigeria’s benchmark stock index rose 2.52 percent to 29,540 points with investors buying across the board in banking, breweries, cement and energy sector stocks.

The Nigerian market, which has the second-biggest weighting after Kuwait on the MSCI frontier market index, remains at a more than five-month low, dented by Wednesday’s GDP data.

“Some investors see the opportunity to take position in the market because they are taking advantage of the fact that most of the stock prices are attractive at the present low level,” trader Austin Egberi said.

Shares of Dangote Cement, Nigeria’s biggest listed firm, gained 1.24 percent to 172.17 naira, First Bank Holdings rose 4.96 percent to 6.08 naira, Guinness climbed 9.36 percent to 138.90 naira, Guaranty Trust Bank rose 5.48 percent to 22.92 naira and energy firm Oando 10.11 percent to 11.22 naira.

Other gainers include Zenith Bank up 4.90 percent to 15.20 naira, Diamond Bank up 4.95 percent to 3.18 naira, while Nigerian Breweries added 5 percent to 121.49 naira.