NIKKEI 225 PLUNGES TO 3-WEEK LOW ON WORRIES ABOUT CHINA, MOMENTUM BEARISH

Nikkei 225 fell 1.32% to close at 23,469.39 on Tuesday. This is its weakest closing since 18th September. The index fell after shares of firms with big exposure to China languished on worries about its economy. Japanese Chip-equipment maker shares also ended in negative territory tracking weakness in U.S. tech stocks on Monday.

The Topix index fell 1.8% to close at 1,761.12 on Tuesday.

Honda Motor and Toyota Motor both dropped 3.1% on Tuesday.

Electronics component manufacturers, as well as Construction machinery makers which are exposed to the Chinese market, were sold off. Murata Manufacturing Co. fell 2.2%, Hitachi Construction Machinery plunged 2% and industrial robot maker Fanuc slid 2.5% on Tuesday.

The Philadelphia SE Semiconductor Index fell 1.1% on Monday, hurting Japanese chip-related shares. Advantest Corp tumbled 4.4%, Tokyo Electron fell 4.5%, and Screen Holdings stumbled 5.6% on Tuesday.

Other top losers in the Nikkei 225 include Shin-Etsu Chemical (fell 4.16%), SUMCO (plunged 8.97%), Ebara (fell 4.5%) and Citizen Watch (fell 4.44%) on Tuesday.

On the economic front, the Japanese Current Account surplus for August released on Monday came in at ¥1.838T. The surplus was less than the expectation of ¥1.896T. The surplus in July was ¥2.010T.

On the technical front, the RSI is currently at 48.01% and suggests that the market can move in the downward direction. The current price is below the MA5. The current price is below the middle line of the Bollinger Bands and is heading downwards.

Overall Bias is Negative and Short-term trades can be initiated with tight Stop Loss and Take Profit targets.

 

Trade Suggestion-Limit Sell At 23500, Take Profit At 23380 Stop Loss At 23560

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