NIKKEI PLUNGES AFTER NATURAL DISASTERS, INDEX CHANGES

Nikkei 225 inched down 0.51% on Thursday to close at 22484. Nikkei fell on the back of broad weakness in global equities, while investors awaited damage assessments after a powerful earthquake in Hokkaido, the latest in a series of natural disasters to hit the country this year.

At least one person was killed and 32 were missing after the quake paralyzed the northern island, triggering landslides and knocking out power to its 5.3 million residents.

Hokkaido Electric Power Co tumbled 6.4% after it said it conducted an emergency shutdown of all its power plants following the quake. Tourism-related stocks were also under pressure, with travel agency operator H.I.S. sliding 3.4%.

The broader Topix fell 0.7 percent to 1,692.41.

Japan began on Wednesday to clean up Kansai Airport after Typhoon Jebi, so as to resume its operations. Kansai airport is the important hub for companies exporting semiconductors in western Japan.

Nikkei Inc., the operator of the Nikkei benchmark index, also influenced trading with its announcement on changes to Nikkei 225. Copper smelter Furukawa Co dived 9.5% after the operator said that it will delete the stock from the index.

CyberAgent rose marginally by 0.2 percent after Nikkei Inc. said it will add its stock to the index.

Nintendo Co and e-commerce business operator Start Today, which had been expected to be added, tumbled 3.6 percent and 7.2 percent, respectively.

Cosmetics makers Shiseido Co dropped 1%and Fancl Corp tanked 2.6%.

Among the top losers for the Nikkei 225, Furukawa fell by 9.4%, Sumco plunged 5.2% and Yahoo Japan tumbled 2.4%.

On the economic front, Household Spending (MoM) for the month of July is scheduled to release early on Friday. Markets expect the spending to drop by 1.2% while in the previous month it increased by 2.9%. At the start of the week Manufacturing PMI for August came in at 52.5 which met market expectations.

On the technical front, the RSI is currently at 43.76% 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 and is heading downwards. So, overall the market setup seems to be negative.

 

Trade Suggestion-Limit Sell At 22450, Take Profit At 22350 Stop Loss At 22500

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