NIKKEI 225 CLOSES AT 3-WEEK LOW AS NASDAQ DECLINE DRAGS TECH

Nikkei 225 futures are currently trading at 21265-lower by 1.48% as compared to the previous closing. The contract has also closed in the negative territory in the previous trading session also.

In the cash markets, the Nikkei 225 declined 1.1% to close at 21,583.12 points on Tuesday. It was its lowest closing level since 31st October. The benchmark fell today as a drop in Nasdaq stocks overnights dragged down Japanese tech names, while Nissan Motor tumbled on news of Chairman Carlos Ghosn’s arrest and dismissal.

The broader Topix shed 0.70% to close at 1,625.67 on Tuesday.

Index-member Nissan Motor plunged 5.5% to end at 950.7 yen on Tuesday. It was its lowest closing level since August 2016. The stock fell after the company said its chairman had been arrested over alleged financial misconduct and would be fired from the board this week. The company further said an internal investigation had revealed that Chairman Ghosn has engaged in wrongdoing including personal use of company money and under-reporting his earnings for years.

Nissan supplier Nissan Shatai stumbled 2.5% and dealer Nissan Tokyo Sales Holdings dropped 4.1% on Tuesday.

Mitsubishi Motors, another member of the Franco-Japanese partnership, also dived 6.9%. The company said it would also remove Ghosn as its chairman.

Other losers in the index included Apple Inc. suppliers after the iPhone maker’s shares plunged overnight. Murata Manufacturing shed 3.5%, TDK Corp and Kyocera Corp dropped 1.9% and 1.6% respectively on Tuesday.

Chip-equipment makers were sold as well, with Tokyo Electron falling 1.8% and Advantest Corp sliding 2.7%.

Other top losers include SCREEN (fell 5.7%), Softbank (fell 4.83%) and Ebara (plunged 4.95%) on Tuesday.

On the economic front, the All Industries Activity Index change for September is scheduled to be released early on Wednesday. The index is expected to fall 0.8% MoM. Previously, the index rose 0.5% MoM in August. In addition, data released on Monday reported that Japanese Exports rose 8.2% in October from a year earlier. Still, Exports growth was below market expectations of 9%.

On the technical front, the RSI is currently at 34.54% and suggests that the market can move in the downward direction. The current price is below the MA5. The current price is below the lower band 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-Stop Sell At 21250, Take Profit At 21050 Stop Loss At 21350

 

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