Nikkei seen gaining on US stocks, weaker yen
The Nikkei stock average is expected to rise on Wednesday, helped by gains in US stocks and a slightly weaker yen, and it may mark fresh eight-month highs as investors continue to add Japanese stocks to their portfolios.
January 12, 2011 / 11:38 IST
The Nikkei stock average is expected to rise on Wednesday, helped by gains in US stocks and a slightly weaker yen, and it may mark fresh eight-month highs as investors continue to add Japanese stocks to their portfolios.
Japan and US shares are in favour as worries about the European debt crisis have prompted investors to pull out of European shares while shares in emerging markets are not seen as attractive due to credit tightening worries, market participants said.Resource stocks such as Inpex and Sumitomo Metal Mining Co may outperform as gold prices rose for a second day on Tuesday and as oil rallied on the deepening worries over the severity of the European debt crisis."Resource shares and exporters are going to lead today's gains," said Yumi Nishimura, senior market analyst at Daiwa Securities Capital Markets.She also said that thanks to a higher euro, there is room for bargain hunting on precision equipment makers like Canon Inc and Olympus Corp, which were sold off the previous day.The euro rallied on Tuesday on speculation eurozone officials could raise the effective lending capacity of the bloc's rescue fund and on talk of increased Portuguese bond buying by the European Central Bank. Analysts say that the benchmark Nikkei may top last week's eight-month closing high of 10,541.04 and is expected to move in a range of 10,450-10,600.Nikkei futures traded in Chicago closed at 10,585, up 45 points from a close of 10,540 in Osaka. If US corporate earnings cheer the market this week, resistance is next seen around at 10,638, a level hit on May 13 when the fiscal crisis in Greece rocked markets across the world, analysts said. 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!
