Nigerian stocks shed 2.4 percent to hit a new three-year low on Wednesday after global oil prices tumbled to their lowest in more than six years.
The stock market, which has the second-biggest weighting after Kuwait on the MSCI frontier market index, fell for the second day on thin volumes to levels not seen since December 2012.
The bourse, which is down 20.6 percent year-to-date, broke below the psychologically key 27,000 point line on Wednesday. Banking shares fell the most, down 3.1 percent as investors sold off relatively liquid financial stocks.
On Tuesday, Brent crude touched its lowest levels since February 2009. Oil plunged after OPEC last week failed to agree a cut in production quotas in the face of slumping prices and a mounting global supply glut. Brent traded at $40.68 on Wednesday.
Nigeria, which relies on oil exports for 70 percent of government revenue, faces its worst economic crisis in years brought on by the sharp fall in crude prices.
Nigeria’s cabinet on Monday agreed a 6 trillion naira budget proposal for 2016, up by 1.5 trillion naira on last year despite low oil prices that have hammered Africa’s biggest economy.
Budget and Planning Minister Udoma Udo Udoma said the cabinet was assuming a conservative oil price of $38 a barrel and oil production at 2.2million barrels per day. Lawmakers passed the 2015 budget at $53 a barrel in April.
Top decliners include Transcorp <TRANSCO.LG, down 8.55 percent, Zenith Bank 7.53 percent and Dangote Cement, which accounts for a third of total market capitalisation, shed 5.0 percent.