NIKKEI 225 FALLS BELOW MA5 AS CHIP, MACHINERY FIRMS SLIDE
Nikkei 225 futures are currently trading at 21700-higher by 0.34% as compared to the previous closing. The contract, however, closed in the negative territory in the last trading session.
In the Cash Markets, the Nikkei 225 inched down 0.44% to close at 21,726.28 on Tuesday. The benchmark index hit its highest intraday level since December 13 in the previous session. The index has risen 8.4% so far this year.
The broad-market index fell today, tracking losses on Wall Street and after Beijing trimmed its economic growth target, putting a cloud over companies with large exposure to China.
The broader Topix declined 0.5% to close at 1,619.23, with 3 of its 33 subsectors trading in negative territory.
Chip equipment makers also lost ground, with Tokyo Electron falling 2.3% and Advantest Corp sliding 2.7% on Tuesday.
China said on Tuesday that the official economic growth target for this year will be 6.0 to 6.5 percent, lower than the growth of 6.6 percent in 2018, the slowest pace since 1990.
Companies on the index with large exposure to the Chinese market, whose stocks rose on Monday, lost some ground on profit-taking.
Factory automation equipment maker Yaskawa Electric, which surged more than 5% on Monday, fell 1.5% today. Robot maker Fanuc, following a jump of 3.5% on Monday, declined 1.3%. Construction equipment maker Komatsu also lost 1.5%.
Heavy machinery maker IHI Corp fell 2.7% after the company admitted that Japan’s transport ministry had inspected it for faulty checks of aircraft engines.
Other top losers in the index include- Advantest (fell 2.72%), Fuji Electric (fell 2.75%) and JGC (fell 2.74%) on Tuesday.
On the data-front, Household Spending index for January is scheduled to be released early on Wednesday. Household Spending is expected to fall 0.4% on a MoM basis from a growth of 0.1% in the previous month.
On the technical front, the RSI is currently at 63.35% and suggests that the market can continue trading sideways. The current price is below the MA5 (21716). The %K has crossed %D from above to the downside at around 93% and suggests that the market can move in the downward direction.
Overall Bias is negative and Short-term trades can be initiated with below mentioned Stop Loss and Profit targets.
Trade Suggestion-Limit Sell At 21740 Take Profit At 21620 Stop Loss At 21800