NIKKEI 225 EDGES UP ON TRADE HOPES; PMI DISSAPOINTS
Nikkei 225 futures are currently trading at 21960-higher by 0.78% 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 added 0.089% to close at 22,098.84 on Tuesday. The broad-market index edged up today supported by optimism that high-level Sino-U.S. trade talks will take place in two weeks and traders bought ahead of companies going ex-dividend later in the week.
Stocks of index heavyweights underperformed today. Softbank Group declined 1.8% while Fast Retailing dropped 1.2% on Tuesday.
According to market sources, market participants bought the Nikkei 225 futures to get ahead of a wave of expected buying later this week by passive investors who will be reinvesting dividends.
Index-component Nissan Motor dropped 1.00% after the U.S. SEC said the company and its former CEO have agreed to settle the illicit compensation claims from the regulator.
Domestic-demand sensitive shares ended mixed on Tuesday. Drug-maker Daiichi Sankyo added 0.09% while Realtor Mitsui Fudosan fell 1.49%.
The broader Topix inched up 0.42% to finish its trading day at 1,622.94 on Tuesday. It was also its highest closing level in 5-months.
On the economic front, the preliminary estimate of Japanese Manufacturing PMI for September released earlier today came in at 48.9. The PMI reading was below the consensus estimates of 49.5.
In addition, the preliminary estimate of Japanese Services PMI for September also out today came in at 52.8. The PMI reading was below the market expectation of 52.7.
On the technical front, the RSI is currently at 71.90% and suggests that the market can move in the upward direction. The current price is above the MA5. The current price is above the middle line of the Bollinger bands and is heading upwards.
Overall Bias is Positive and Short-term trades can be initiated with below mentioned Stop Loss and Profit targets.
Trade Suggestion- Limit Buy At 21920 Take Profit At 22020 Stop Loss At 21820