Nikkei likely to rise as eurozone fears ease
Japan's Nikkei share average is expected to gain on Thursday, after hitting an eight-month intraday high the day before, following gains in US stocks and as a successful bond auction in Portugal eased fears about the eurozone's debt crisis.
January 13, 2011 / 08:50 IST
Japan's Nikkei share average is expected to gain on Thursday, after hitting an eight-month intraday high the day before, following gains in US stocks and as a successful bond auction in Portugal eased fears about the eurozone's debt crisis.
Banks, which led Wednesday's advance, are likely to extend gains after financials supported US shares. JPMorgan Chase & Co rose 2.5% after its chief executive said the bank could increase its dividend. Resource stocks such as Inpex and Sumitomo Metal Mining Co are also expected to gain as oil trades at 27-month highs, inching towards USD 100 a barrel for the first time since 2008, and gold prices rose to a one-week high on Wednesday."Easing worries over the eurozone and stronger signs of global economic recovery will help lift the Nikkei today," said Hiroichi Nishi, general manager at Nikko Cordial Securities.Analysts say the benchmark Nikkei may rise above the previous day's eight-month closing high of 10,576.51 and is expected to move in a range of 10,500-10,650.It may test crucial resistance around 10,638, a level hit on May 13 last year, analysts said.Nikkei futures traded in Chicago closed at 10,620, up 1% from 10,520 in Osaka ."Yesterday's high volume also indicates that the Nikkei will go higher today. It has had a very strong start to the year, so we may also see some profit-taking, but the overall trend is for the index to go up," added Nishi.A healthy bond auction in Portugal drove investors into riskier assets. Investors were hopeful eurozone finance ministers would beef up the European Union's rescue fund. Banks and property shares led the Nikkei's advance on Wednesday, as foreign funds continued adding underweight financial stocks to their portfolios and property shares were in favour due to the Bank of Japan's asset buying scheme. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
