NIKKEI 225 RISES ON SHORT-COVERING; CSPI DISAPPOINTS

Nikkei 225 futures are currently trading at 21335-higher by 2.42% 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 rose 2.15% to close at 21,428.39 on Tuesday. The broad-market index registered its biggest drop since late December the day before.

The broader Topix gained 2.57% to close at 1,617.94.

The benchmark bounced from five-week lows to close higher today as cyclical equities rose on short-covering following a sell-off on Monday due to concerns of a sharp global economic slowdown.

With the end of the business year approaching on 31st March for a majority of listed Japanese companies, the market was also supported by trader purchases of shares before they go ex-dividend later in the day. Index futures are also in demand by index and mutual funds before shares go ex-dividend.

Exporters rallied, with Panasonic Corp jumping 4.1%, Advantest Corp up 1.9% and Yaskawa Electric rising 2.4% on Tuesday.

Insurers and banks, which hunt for higher-yielding assets such as foreign bonds, were bought. MS&AD Insurance advanced 2.45% and Dai-ichi Life added 2.57%, while Sumitomo Mitsui Financial Group rallied 2.30%.

Index heavyweights Fast Retailing (added 0.25%) and robot maker Fanuc (rose 1.7%) posted gains on Tuesday.

On the data-front, Bank of Japan Core CPI (YoY) released earlier today came in at 0.4%. The CPI change was 0.5% in the previous month. In addition, the Corporate Services Price Index (YoY) also out today came in at 1.1%. The index change was below the market expectation of 1.2%.

On the technical front, the RSI is currently at 52.72% and suggests that the market can move in the upward direction. The current price is above the MA5. The %K has crossed %D from below to the upside at around 45% 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 21315 Take Profit At 21435 Stop Loss At 21255

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