Nikkei flat, shrugs off lower commodities prices
Japan's Nikkei average was flat on Wednesday, holding on to gains made a day earlier and shrugging off concerns about lower commodity prices as investors continue to bargain hunt lagging Japan shares.
January 05, 2011 / 08:32 IST
Japan's Nikkei average was flat on Wednesday, holding on to gains made a day earlier and shrugging off concerns about lower commodity prices as investors continue to bargain hunt lagging Japan shares.
Market analysts say that although the market is likely to see some profit taking after a rally Tuesday, losses will be limited with strong US economic data lending support."I would expect Asian stocks to be slightly weaker although in Japan the weaker yen will probably help its important export sector," said Jamie Coutts, a technical analyst at BGC Securities.He said although the Nikkei has recently been stalling near the 61.8% Fibonacci retracement of its April to August fall at 10,403, it could breach that level later on Wednesday.After opening slightly lower, the Nikkei was up 0.04% at 10,402.27, adding to 1.7% gain on Tuesday. The Nikkei is expected to move in a range of 10,300 to 10,450, analysts said. The broader Topix index added 0.2% to 913.29.Commodities prices were hit by profit-taking after heady gains made in thin holiday volume over the past two weeks, prompting gold and oil prices to slide more than 2% on Tuesday. But analysts say the Nikkei will likely be supported by optimism about the recovery in the US economy, and the rising dollar is expected to help Japanese exporters rise in the mid-term."Investors are focusing on the US payroll data this week, so they may stay on the sidelines for this week, but the mood is positive," said Hiroichi Nishi, general manager at Nikko Cordial Securities.The US dollar bounced from three-week lows against the euro on Tuesday and held firm in early Asia trade around 82 yen after strong US economic data, and more gains are seen likely given the heavy sales of eurozone bonds anticipated this year.Data showed new orders received by US factories rose in November and orders, excluding transportation, recorded their largest gain in eight months.Exporters were aided by a weaker yen. Toshiba Corp rose 2.2% to 459 yen, also helped by a Nikkei business daily report that its unit Westinghouse Electric Co will work with China's State Nuclear Power Technology Corp to develop a large nuclear reactor.Toyota Motor Corp was up 0.8% at 3,290 yen. Nissan Motor Co added 1% to 814 yen in heavy trade after the automaker posted robust US sales for December. Its vehicle sales rose 27.7% to 93,730 units in December from a year earlier.Resource shares underperformed, with Sumitomo Metal Mining falling 0.8% to 1,437 yen and Inpex Holdings dropping 0.4% to 492,500 yen. 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!
