NIKKEI 225 RISES ABOVE MA5 ON U.S.-CHINA TRADE OPTIMISM
Nikkei 225 futures are currently trading at 21245-higher by 0.04% 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 inched up 0.10% to close at 21,302.65 on Tuesday. The benchmark today closed at its highest level since mid-December. The benchmark rose today on hopes of a breakthrough in U.S.-China trade talks, though the gains were led by defensive stocks as investors remained cautious on the global economic outlook.
The broader Topix advanced 0.28% to close at 1,606.52. It was also the benchmark’s highest level in two months.
Defensive stocks rose today with East Japan Railway and Central Japan Railway gaining 2% and 1.6%, respectively. Utility shares also advanced with Chubu Electric Power rising 2.7% and Tokyo Gas 2.2%.
Other top gainers in the index include- Aeon (rose 2.5%), TOKYU (rose 3.8%) and COMSYS (rose 3.2%) on Tuesday.
Among top index losers, SoftBank Group stocks fell 3.3% on Tuesday. The stock dropped after the Wall Street Journal reported that its key investors, including Saudi Arabia’s sovereign wealth fund, were unhappy with the high valuation of its flagship Vision Fund.
Many manufacturing stocks fell as investors remain cautious that slowdowns in China and elsewhere could hurt their top line. Robot maker Fanuc inched down 0.3% and Panasonic fell 0.7%.
On the economic front, Reuters Tankan Index for February released on Monday came in at 13. The index reading was 18 in January. The index showed that corporate sentiment in February slipped to the lowest levels since late 2016, also weighed on investor sentiment.
In addition, Balance of trade for January scheduled for Wednesday is expected to come in at -1,011B yen. The trade balance was -57B yen in December.
On the technical front, the RSI is currently at 60.18% and suggests that the market can continue trading sideways. The current price is above the MA5. The %K has crossed %D from below to the upside at around 85% and suggests that the market can move in the upward direction.
Overall Bias is positive and Short-term trades can be initiated with below mentioned Stop Loss and Profit targets.
Trade Suggestion-Limit Buy At 21225 Take Profit At 21345 Stop Loss At 21165