Nikkei 225 index muted after US, China ink deal
The market reacted tepidly to what some felt was an expected phase one deal.
Tokyo benchmark index Nikkei 225 performed softly on Thursday morning (16 January), as it dipped 0.23% within the first 90 minutes of trading.
At 10.30am this morning, the Nikkei fell below its previous closing of 23,916.58, but was able to recover at closing to 23,933.13 – an increase of 0.07%.
So far this year, the index has been on an uptrend, having risen over 3.5% since the start of 2020.
Muted market reaction
One possible cause of the tepid reception was because some felt the deal was more limited than they had hoped, which could lead to new issues between the two countries.
In the deal, an 86-page document reiterates previous pledges already made by China. Other key topics, including China’s restrictions on US technology investments, were not addressed.
‘The Tokyo market’s reaction to the US-China trade deal was muted as it fell in line with what investors had expected,’ Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management Co., told The Japan Times.
Investors found that the deal was ‘neither a positive nor a negative surprise’, he added.
Practise trading indices and more with an IG demo account today.
Investors already looking ahead
Japanese broker Toshikazu Horiuchi said that while the Sino-American phase one trade deal signing was momentous, investors are already looking ahead.
‘But since the signing of the US-China deal has ended, investors remained on the sidelines, looking for fresh trading factors,’ Horiuchi told AFP.
‘Now investors are waiting for Japanese corporate results, which will be announced starting later this month,’ he added.
Individual equities were more receptive of the deal. Top-performing major stocks on the day include: Sony Corp, which added 0.71% to 7,936 yen; Uniqlo owner Fast Retailing with 1.38% to 65,210 yen; Suzuki Motor Corp rising 2.5% to 4,832 yen; and Asics Group with 2.52% to 1,703 yen.
On the other hand, top losers include: SoftBank Corporation, tumbling 2.14 per cent to 4,872 yen; and Shiseido Co Ltd, falling 1.38% to 7,873 yen.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
