NIKKEI 225 AT 6-WEEK LOW- GLOBAL SELLOFF, NISSAN INDICTMENT & GDP CREATE PRESSURE
Nikkei 225 futures are currently trading at 21225-lower by 0.93% as compared to the previous closing. The index futures closed in Negative territory in the last trading session also. Further back, the benchmark futures closed in the red in 5 out of the last 6 trading sessions.
Japanese equities dived to a six-week low today, as a deeper-than-expected economic contraction at home in the third quarter and a sharp sell-off on Wall Street depressed sentiment.
US-China trade tensions hit global equities and pushed the Nikkei 225 into negative territory on Monday. The index fell 2.1% to close at 21,219.50. It was its lowest closing level since 29th October. The benchmark index has plunged 13.2% from a 27-year high (24,245.76) hit in early October.
The broader Topix lost 1.9% to close at 1,589.81 on Monday. Large cap shares were hit hard, with the Topix Core 30 index sinking to a level not seen since April 2017.
Index-member Nissan Motor fell 2.9% after Tokyo prosecutors indicted the automaker along with its ousted Chairman Carlos Ghosn on Monday.
Index-heavyweights Fast Retailing also fell 2.4% on Monday. Japan Display plummeted about 11% after the Nikkei business daily reported that the company is cutting production of smartphone liquid crystal displays in December. Audio equipment maker Pioneer Corp plunged 27% as it started trading after news on Friday that the company will be bought by buyout firm Baring Private Equity and be delisted.
Construction machinery makers Komatsu Ltd plunged 5.2% and Hitachi Construction Machinery dropped 4.1%, while Factory automation equipment makers Fanuc Corp lost 1.9% on Monday. Cosmetics maker Shiseido Co. fell 2.2% and Kao Corp dropped 3.9%.
On the economic front, Japanese GDP data for the third quarter was released earlier today. The QoQ rate of change in the GDP was -0.6%. The GDP change was below market expectations of a decline of 0.5%.
On the technical front, the RSI is currently at 37.88% and suggests that the market can move in the downward direction. The current price is below the MA5 (21374). The current price is below the middle line of the Bollinger Bands and is heading downwards.
Overall Bias is Negative and Short-term trades can be initiated with tight Stop Loss and Take Profit targets.
Trade Suggestion-Limit Sell At 21260, Take Profit At 21110 Stop Loss At 21340