NIKKEI 225 FALLS AS GLOBAL GROWTH CONCERNS WEIGH; BoJ DECISION AWAITED
Nikkei 225 futures are currently trading at 20525-lower by 0.89% as compared to the previous closing. The contract closed in the negative territory in the last trading session also.
In the Cash Markets, the Nikkei 225 inched down 0.47% to close at 20,622.91 on Tuesday. The benchmark closed at over a one-month high on Monday. The broad market index fell as traders took profits from recent gainers amid concerns about slowing global economic growth.
The broader Topix inched down 0.63% to close at 1,556.43 on Tuesday.
The IMF on Monday cut its world economic growth forecasts for 2019 and 2020 due to weakness in Europe and some emerging markets and said failure to resolve trade tensions could further destabilize a slowing global economy.
Panasonic stock dived 2.7% on Tuesday. The stock fell after sources said that Tesla Inc. has signed a preliminary agreement with China’s Tianjin Lishen to supply batteries for its new Shanghai car factory, as it aims to cut its reliance on Panasonic.
Among top index losers were machinery makers which have large exposure to China as well as chip-related stocks. Fanuc Corp fell 2.1%, Yaskawa Electric dropped 2.3% and Tokyo Electron fell 1.8% on Tuesday.
Other top losers in the index include IHI (fell 2.3%), Fujikura (fell 2.5%), and Yamaha. (fell 2.9%) on Tuesday.
On the other hand, Air-conditioning system maker Totech Corp rose 10% after it raised its net profit outlook for the year ending March to 3.6 billion yen from 3.2 billion yen.
On the interest rate front, the Bank of Japan’s Interest rate decision is scheduled to be released on Wednesday. No change in policy is expected and Interest rates are expected to hold at -0.10%.
On the technical front, the RSI is currently at 51.43% and suggests that the market can move in the downward direction. The current price is above the MA5. The current price is above the middle line of the Bollinger Bands but is heading downwards.
Overall Bias is negative and Short-term trades can be initiated with below mentioned Stop Loss and Profit targets.
Trade Suggestion-Limit Sell At 20560 Take Profit At 20440 Stop Loss At 20620