NIKKEI 225 EDGES DOWN AS TRADE CONCERNS, STRONG YEN CURBS RISK APPETITE

Nikkei 225 futures are currently trading at 20565-higher by 0.58% as compared to the previous closing. The contract closed in the positive territory in the last trading session also.

In the Cash Markets, the Nikkei 225 edged down 0.011% to close at 20,408.54 on Tuesday. The benchmark index hit a new 3-month low of 20,408.54 earlier in the session. The broad-market index edged down today as trade tensions and a stronger yen curbed risk appetite. The index has fallen by 8% since the beginning of May.

The broader Topix added 0.008% to close at 1,499.09 on Tuesday.

A fall in the U.S. technology sector the day before dampened sentiment, dragging down SoftBank Group by 3.27%. The share took a hefty negative 35 points off from the benchmark.

Defensive stocks also ended lower on Tuesday. KDDI Corp fell 2.15% and Nippon Telegraph and Telephone Corp declined 0.74%.

Domestic-demand sensitive shares closed mixed on Tuesday. Drugmaker Daiichi Sankyo added 1.40% while Realtor Mitsui Fudosan inched down 0.41%.

On the other hand, shares of Casio Computer rose 1.65% after the company said that it will buy back up to 5 billion yen of its own stocks.

Stocks of companies with high exposure to China such as factory automation machinery firms and construction equipment makers also ended in positive territory on Tuesday. Komatsu Ltd added 1.24% and Yaskawa Electric rose 2.42%.

Other cyclical shares also rose on Tuesday with shippers Mitsui OSK Lines rising 2.79% and Kawasaki Kisen advancing 1.83%.

On the economic front, Japan Capital Spending (YoY) for the first quarter released earlier today came in at 6.1%. The index change was above the market expectation of 2.6%.In addition, Japanese Monetary Base (YoY) also released earlier today came in at 3.6%. The index change was above the consensus estimates of 3.2%.

On the technical front, the RSI is currently at 34.29% and suggests that the market can move in the upward direction. The current price is above the MA5. The %K has crossed the %D from below to the upside at around 10% and suggests that the market can move in the upward direction.

Overall Bias is Positive and Short-term trades can be initiated with below mentioned Stop Loss and Profit targets.

 

Trade Suggestion- Limit Buy At 20555 Take Profit At 20665 Stop Loss At 20500

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