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NIKKEI 225 INCHES DOWN AS HUAWEI FALLOUT HITS SUPPLIERS; MACHINERY ORDERS AWAITED - Capital Street FX

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    • NIKKEI 225 INCHES DOWN AS HUAWEI FALLOUT HITS SUPPLIERS; MACHINERY ORDERS AWAITED
21-May
20:27 IST

Nikkei 225 futures are currently trading at 21340-higher by 0.92% 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 down 0.14% to close at 21,272.45 on Tuesday. The broad-market index briefly turned positive after news the U.S. government had temporarily removed trade restrictions imposed last week on Chinese company Huawei Technologies.

The benchmark index inched down today as U.S. government’s blacklisting of Huawei dragged down stocks of suppliers to the Chinese telecoms equipment maker, but the losses were limited after Washington granted a reprieve from penalties to Huawei and its subsidiaries until 19th August.

The broader Topix lost 0.30% to close at 1,550.30 on Tuesday.

The electric machinery sector declined by 1%, underperforming the overall market. TDK Corp shed 0.9%, while Tokyo Electron fell 1.9%, Taiyo Yuden slipped 0.6% and Hitachi High-Technologies lost 1.7%.

Other cyclical shares also fell on Tuesday with shippers Mitsui OSK Lines falling 3.97% and Kawasaki Kisen tumbling 4.11%.

Companies related to Oil and Mining sectors also lost ground with Inpex Corp falling 2.6% and JXTG Holdings stumbling 1.38%.

Defensive stocks ended in negative territory on Tuesday. KDDI Corp declined 0.91% and Nippon Telegraph and Telephone Corp fell 1.03%.

On the other hand, Stocks of SoftBank, which has a stake in Sprint Corp, rose 3.53% on Tuesday. The stock gained after news that T-Mobile US Inc’s $26 billion acquisition of rival Sprint appeared to win the support of a majority of the Federal Communications Commission.

Domestic-demand sensitive shares rose today as investors stayed defensive. Drugmaker Daiichi Sankyo added 1.15% and Realtor Mitsui Fudosan gained 1.67%.

On the data-front, Core Machinery Orders for March is scheduled to be released early on Wednesday. Orders are expected to fall by 0.7% on a month-on-month basis.

On the technical front, the RSI is currently at 42.07% and suggests that the market can move in the upward direction. The current price is above the MA5. The %K has crossed the %D from below to the upside at around 17% 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 21320 Take Profit At 21430 Stop Loss At 21270

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