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.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
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. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.