ABUJA: Nigerian stocks dropped to a 10-week low on Tuesday, as banking shares fell and yield-hungry investors eyed debt for returns, traders said.

The all-share index, which rose 50% in 2020, shed 1.8% on Tuesday, the most in one day since December. The index of Nigeria's top 10 banking shares shed 5.3%.

Stocks had been rising since October as local funds moved into equities following two rate cuts last year, and as excess naira flooded money markets due to historically low yields on the debt market.

But they began losing ground last month - despite a rise in oil prices and higher dividend yields following 2020 year-end results - as yields on Treasury bills are set to rise.

At an open market Treasury auction in February, the central bank nearly doubled the yield it was paying, which had been close to zero last year, in order to lure foreign investors. A re-rating of equities followed.

Shares in 26 companies fell on Tuesday, while 14 advanced and another 100 recorded no trades.

Eterna Oil and UBA shed 10%, the maximum allowed on the bourse. MTN Nigeria, the second biggest listed firm, fell 5.88%.