NIKKEI 225 INCHES UP AS HIGHER BOND YIELDS LIFT BANKING SECTOR

Nikkei 225 futures are currently trading at 21330-higher by 0.07% 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 0.35% to close at 21,392.10 on Tuesday. The broad-market index touched its highest level (21,438.35) during the session.

The benchmark index rose today as exporters boosted by a weaker yen and a rebound in bond yields supporting the banking sector. There were 161 gainers on the benchmark index against 64 losers.

The Nikkei 225 has advanced for the sixth straight session as ease in Sino-U.S. trade tensions lifted global equities.

The broader Topix added 0.44% to close at 1,557.99 on Tuesday.

Stocks of exporting automakers advanced as the yen dropped to its lowest level since August against the dollar.

Subaru Corp. rose 2.3%, Toyota Motor Corp gained 1.3% and Honda Motor Co surged 2.4%.

Nissan Motor Co rose 3.72% after news that the company’s CEO will resign, bowing to pressure after he admitted to being improperly overpaid.

Sumitomo Mitsui Financial Group surged 3.4%, Mizuho Financial Group gained 3.3% and Mitsubishi UFJ Financial Group rose 4% due to a bounce in bond yields, which are expected to reinforce banks’ profitability.

Yields of major government bonds rose today as risk appetite improved and faded investor demand for safe-haven debt.

Stocks of companies with heavy exposure to China rose amid the continuing retreat in Sino-U.S. trade dispute concerns. Hitachi Construction Machinery Co. and Komatsu Ltd gained 4.5% and 3% respectively. Robot manufacturer Fanuc Corp rose 3.2%.

On the other hand, Domestic-demand sensitive shares underperformed on Tuesday. Drug-maker Daiichi Sankyo plunged 7.2% while Realtor Mitsui Fudosan declined 1.9%.

On the technical front, the RSI is currently at 65.55% 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 21380 Take Profit At 21240 Stop Loss At 21450

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