NIKKEI 225 FALLS BELOW MA5 ON EARNINGS FEAR; CPI AWAITED
Nikkei 225 futures are currently trading at 21090-lower by 1.45% 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 lost 1.97% to close at 21,046.24 on Thursday. The benchmark index touched a one-month low of 20,993.44 during the session. The Nikkei share average today also posted its second-biggest fall of this year.
The broad-market index fell today as lower-than-expected export data and disappointing U.S. corporate earnings ignited fresh concerns about fallout from the U.S.-China trade tensions.
Official data released earlier today showed that Japan’s exports to China in June fell more than 10% from a year earlier. It was also its sixth drop in the last seven months.
The broader Topix lost 2.11% to close at 1,534.27 on Thursday. It was its nearly one-month lowest closing level.
Index-member Canon plunged 4.02% after the Nikkei business daily reported its operating profit was set to fall 40% this year.
Cyclicals, as well as defensive stocks, declined today. Some stocks related to animation-making industry dropped after people dead in a suspected case of arson at an animation studio in Kyoto. Stocks of Cinema Company Toho declined by 4.50% on Thursday.
Retailers also underperformed on Thursday, with Marui Group falling 2.50% and J. Front Retailing declining 2.21%.
Stocks of Food companies also ended in negative territory today. Takara Holdings lost 2.76% and NH Foods fell 2.99% on Thursday.
Companies with high exposure to China such as factory automation machinery firms and construction equipment makers also underperformed on Thursday. Komatsu Ltd lost 2.61% while Yaskawa Electric plunged 2.55%.
On the economic front, Japan’s Exports for June released earlier today came in at -6.7%. Exports change were below the market expectation of a fall of 5.6%.
The Japanese National Core CPI for June is scheduled to be released early on Friday. The CPI is expected to rise by 0.6% in June on a year-on-year basis.
On the technical front, the RSI is currently at 39.89% and suggests that the market can continue trading sideways. The current price is below the MA5. The %K has crossed the %D from above to the downside at around 73% 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 21125 Take Profit At 21010 Stop Loss At 21070