NIKKEI 225 FALLS ON STRONGER YEN, GLOBAL POLITICAL RISKS
Nikkei 225 futures are currently trading at 20625-higher by 1.63% 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 fell 1.11% to close at 20,455.44 on Tuesday. It was the benchmark’s lowest level in a week.
The broad-market index dropped today due to concerns regarding the Sino-U.S. trade dispute and protests in Hong Kong.
The broader Topix declined 1.15% to close at 1,486.57 on Tuesday.
U.S. President Donald Trump said last week that the U.S. was not ready to reach a trade deal with China. President Trump even called an early September round of trade talks into question which aroused fears that both sides trade tensions are not likely to end any time soon.
Protests in Hong Kong also dampened investor’s sentiment on Tuesday.
The Yen today hovered near its seven-month highs. The stronger Japanese currency dragged down stocks of Exporters. TDK Corp. declined 3.10% and Subaru Corp dropped 3.60%.
Index-component Bridgestone slipped 3.22% after the company said full-year net profit through December would drop 1%, citing a demand slowdown in North America.
Stocks of JFE Holding plunged 6.3% today. The stock dropped after the company’s operating profit, excluding one-off gains or losses, fell 63% in the April-June quarter.
Cyclical shares also fell today due to a firmer Yen with shippers Mitsui OSK Lines falling 1.5% and Kawasaki Kisen tumbling 4.5%.
Defensive stocks underperformed on Tuesday. KDDI Corp dropped 1.6% and Nippon Telegraph and Telephone Corp declined 1.2%.
Domestic-demand sensitive shares ended mixed on Tuesday. Drugmaker Daiichi Sankyo rose 3.1% while Realtor Mitsui Fudosan declined 1.2%.
On the technical front, the RSI is currently at 39.39% and suggests that the market can move in the upward direction. The current price is above the MA5. The current price is below the middle line of the Bollinger bands but 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 20600 Take Profit At 20770 Stop Loss At 20515