Nigeria’s financial markets began November 2025 on a sour note as the naira and equities weakened sharply following remarks by United States President Donald Trump, who threatened possible military action against Nigeria over alleged religious persecution.

Data from the Central Bank of Nigeria showed that the naira, which had traded at a 2025 peak of N1,421.73/$, depreciated to N1,436.34/$ on Monday, marking a 1.03 per cent decline or N14.61 loss in one day. The currency also weakened at the parallel market to N1,455/$, reflecting increased investor anxiety and foreign-exchange demand pressure.

The sudden depreciation followed a weekend of heightened geopolitical tension after Trump, via his Truth Social platform, labelled Nigeria a “country of particular concern” and directed the US Department of War to prepare for “possible action” should alleged killings of Christians persist.

According to Trump, the move was a response to what he described as a “Christian genocide” in Nigeria — a claim that sparked global debate and uncertainty about diplomatic and economic implications for Africa’s largest economy.

The development quickly rippled through financial markets. At the Nigerian Exchange Limited, bearish trading resumed on Monday as the All-Share Index dropped by 0.25 per cent to close at 153,739.11 points, trimming year-to-date gains to 49.37 per cent. Market capitalisation declined by N245.88 billion, settling at N97.58tn.

The downturn was largely driven by selloffs in Aradel Holdings (-9.21 per cent) and Access Corporation (-3.07 per cent). Investor sentiment remained weak, with 38 stocks declining against 19 gainers. Union Dicon emerged as the top gainer (+9.93 per cent), while Honeywell Flour Mills led the losers (-10.00 per cent).

Trading activity also slowed sharply, as total volume and value traded plunged 87.94 per cent and 44.64 per cent, respectively, to 627.5 million units worth N25bn. United Bank for Africa dominated the session, accounting for 136.8 million units (21.8 per cent of total volume) valued at N5.5bn (22.2 per cent of total value).

Across sectors, performance was mixed. Oil & Gas (-3.94 per cent), Commodities (-1.85 per cent), Insurance (-1.48 per cent), and Banking (-0.22 per cent) all recorded losses, while Consumer Goods rose slightly by 0.49 per cent. The Industrial sector closed flat.

In the bond market, Cowry Assets Management reported that investor appetite for Nigeria’s Eurobonds weakened on Monday, with average yields rising by 5 basis points to 7.70 per cent. The investment firm attributed this to global risk aversion, macroeconomic uncertainty, and geopolitical concerns.

According to Bloomberg, Nigeria’s dollar-denominated bonds were the worst-performing among emerging markets on Monday, with all ten notes ranking among the global underperformers. Bonds maturing in 2047 fell the most, down 0.6 cents on the dollar to 88.26 cents before paring some losses later in the day.

Despite the turmoil, some analysts described the reaction as temporary. Tilewa Adebajo, Chief Executive Officer of CFG Advisory, told The PUNCH that the market’s reaction was “not sustainable.”

“This appears to be a mere blip,” Adebajo said. “Closing prices in global markets today already reflect recovery. With Nigeria recently removed from the FATF Grey List, the market still offers strong long-term fundamentals.”

However, Dr Musa Yusuf, CEO of the Centre for the Promotion of Private Enterprise, warned that Trump’s statements could seriously undermine investor confidence.

“The US President’s threat of military intervention in Nigeria is unwarranted, counterproductive, and economically destabilising,” Yusuf said in a policy brief. “Such remarks send unsettling signals to investors, heighten risk perception, and undermine confidence in Nigeria’s economy.”

He added that while Nigeria must continue to strengthen its internal security and governance, any engagement with foreign powers “should be cooperative, not coercive.”

“Unilateral military action,” Yusuf warned, “would destabilise Nigeria’s economy, threaten regional stability, and worsen humanitarian conditions. The constructive path forward lies in diplomacy, partnership, and mutual respect for sovereignty.”

As markets await clarity on US policy and Nigeria’s diplomatic response, analysts say sustained stability will depend on calm, confidence-building measures, and consistent macroeconomic policy from the Federal Government and the CBN.