Asian Stock Market Overview Nikkei Drops, S. Korea Down

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Asian Stocks Trade Mixed, Nikkei Drops as Yen Strengthens

Asian Stocks Trade Mixed, Nikkei Drops as Yen Strengthens

The sentiment on the Asian indices appears mixed on Monday, posing a cautious start to the week, as markets assess the Chinese GDP growth target as well as the US jobs data.

Nikkei bucks the trend

The Japanese benchmark index, the Nikkei 225, extends losses and drops further below 17k mark, down -0.70%. The Japanese index emerges the worst performer in today’s trade so far as the persistent cautious tone in the market underpins the yen and hence, weighs on the retail and exports-oriented stocks. While the energy stocks found support from higher oil prices and help limit the downside. USD/JPY drops -0.10% to trade around hourly 100-SMA at 113.65.

Heavy gains seen in the energy and metal-mining stocks lifted the Australian equities, driving the ASX 200 index +1% to 5,140. While the Chinese markets remained firmer as investors’ weighed weekend’s news from China – the National People’s Congress announcing Chinese GDP target range between 6.5-7.0% for 2020, marking the slowest expansion in a quarter century. The Shanghai Composite trades 0.46%, Shenzhen’s CSI300 advances 0.59%. Hong Kong’s Hang Seng trades modestly flat.

Asia stocks drop as EU contagion fears grow; Nikkei down 0.9%

Asia stocks drop as EU contagion fears grow; Nikkei down 0.9%

Forexpros – Asian stock markets were broadly lower on Wednesday, as investors dumped riskier assets amid growing fears that the euro zone’s sovereign debt crisis will spread to the region’s core economies.

During late Asian trade, Hong Kong’s Hang Seng Index tumbled 2.4%, Australia’s ASX/200 Index shed 0.89%, while Japan’s Nikkei 225 Index slumped 0.92%.

Appetite for riskier assets was dented after Italy’s 10-year bond yields rose above 7% on Tuesday, a level widely viewed as unsustainable for long-term borrowing, while Spanish 10-year yields rose above 6% for the first time since the European Central Bank started to buy the country’s bonds in August.

Adding to nervousness over the region’s debt crisis, French government debt came under pressure, with the 10-year yield rising to 3.69%, the highest since early May.

Japanese exporters with high exposure to Europe traded lower, with consumer electronics giant Sony tumbling 3.3%, while automakers Honda and Nissan saw shares drop 2.15% and 2.4% respectively.

Japanese lenders contributed to losses, with investment banks Nomura Holdings and Daiwa Securities plunging 4.35% and 4.6% apiece, amid concerns over their exposure to European sovereign debt.

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On the upside, scandal-hit Olympus rallied for the third consecutive day, jumping 15.6% amid speculation the company will avoid delisting from the Tokyo Stock Exchange. The stock has gained nearly 38% in the past three sessions.

Elsewhere, in Hong Kong, shares in property developers led losses after the International Monetary Fund warned about dangers of a Hong Kong property bubble in a report earlier in the day.

Hang Lung Properties dropped 3.2%, Sino Land Properties fell 2.75%, while real estate developers Henderson Land Development and China Overseas Land & Development slumped 3.55% and 4.7% respectively.

Hong Kong-based exporters also contributed to losses, with shares in Esprit Holdings, which counts Europe as its largest market tumbling 4% and Li & Fung shares dropping 2.7%.

Meanwhile, the outlook for European stock markets was downbeat. The EURO STOXX 50 futures pointed to a loss of 0.5%, France’s CAC 40 futures shed 0.4%, the FTSE 100 futures slipped 0.5%, while Germany’s DAX futures indicated a drop of 0.9%.

Later in the day, the euro zone and the U.S. were to release official data on consumer price inflation, while the U.S. was also to produce data on industrial production.

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At a glance: the Japanese stock market today

Many traders choose to invest in the Japanese stock market owing to the Japanese government’s success in building a market renowned for its transparency, integrity and stability.

Japan can easily boast of its market-oriented economy, which is the third largest in the world measured by nominal GDP and the fourth largest by purchasing power parity.

Additionally, Japan is included in the G7, the group of seven countries with the largest IMF-described advanced economies, representing 58% of the global net wealth. The G7 includes Japan, Canada, the UK, the US, France, Germany, and Italy.

The “Land of the Rising Sun” is the cradle of some of the most highly-valued global brands in the sphere of electronics, car manufacturing, renewables, transport, heavy industry and trading. Fun fact: Japan is the third largest automobile manufacturing country in the world.

The Japanese stock market provides investors and traders with well-functioning capital markets, characterised by diversity and deep liquidity. The Japanese stock market lists the shares for some of the world’s most recognised brands, such as technology companies Sony and Toshiba, and car manufacturers Nissan and Mazda.

Japan Exchange Group

The Japanese stocks are presented by the Japan Exchange Group, also known as JPX, which operates multiple securities exchange markets. It was formed by the merger of two many Japanese entities – the Tokyo Stock Exchange and the Osaka Securities Exchange – on 1 January 2020.

JPX provides its users with reliable venues for trading securities and listed derivatives instruments. The group also offers clearing and settlement services through a central counterparty, and conducts trading oversight to maintain the integrity of its markets.

The Japan Exchange Group lists 3,656 companies as of 5 March 2020, making it the foremost stock market in Asia and the world’s third largest securities exchange, following the New York Stock Exchange (NYSE) and NASDAQ by market capitalisation.

The Tokyo Stock Exchange (TSE) was founded on 16 May 1949, but its origins go back to 1878 when it launched as Tokyo Kabushiki Torihikijo on 15 May of that year.

The TSE divides stocks into three different groups based on the scale of the business: the First Section (for large companies); the Second Section (for mid-sized companies); and the Mothers section (for high-growth startups).

The main indices tracking the TSE are the J30, the TOPIX Index and the Nikkei 225.

The Osaka Securities Exchange Co., Ltd. (OSE) is the second largest securities exchange in Japan. It was established in April 1949. In spite of its name, trading on the Osaka Stock Exchange currently takes place in Tokyo.

In July 2006, the exchange launched its newest futures contract, the Nikkei 225 mini, which is one-tenth of a size of the original Nikkei stock market index. The innovation was warmly welcomed and became very popular among Japanese investors at the time.

Japanese stocks to invest in

While there are a larger number of Japanese stocks, one of the most popular indices is the Nikkei 225, also known as Japan 225 or Nikkei. It is the oldest Asian stock index. The Nikkei was introduced in May 1949, around the same time that the country’s economy began to recover after World War II. The index was named after the Nikkei, a Japanese economic newspaper, which has been calculating the index since 1950.

Open a trading account in less than 3 min

The Japanese stock index, the Nikkei 225, is popular with investors around the world. The index embraces 225 of the largest domestic stocks, traded on the TSE, chosen from the most liquid shares in the exchange’s First Section. The list of companies represent various industry sectors (e.g. technology, financial, consumer goods, capital goods, materials, transportation, etc.) The Nikkei is referred to as a national benchmark index and is a major indicator of the overall performance of the Japanese stock market.

All of the shares offered on the Nikkei 225 are highly liquid. As such, the Nikkei 225 is often compared to the Dow Jones Industrial Average Index (DJIA). In fact, these two are identical in that both are price-weighted, which means that stocks with a higher price will have a higher weighting and have more influence over the index’s performance. Moreover, between 1985 and 1995, the Nikkei was licensed to use the Dow’s name. In the past, it has been known as the Nikkei Dow-Jones Stock Price Average, or the TSE Dow.

The composition of the indices is reviewed by Nikkei newspaper every October in order to ensure it adequately represents the overall performance of the market. Stocks with high market liquidity may replace those with lower ones; the balance of the sectors is also taken into consideration. Additional changes to the index can take place in times of instability, such as the bankruptcy of a company or a merger.

A lot of traders choose to trade with the Nikkei stock market index out of all other Japanese stocks as it offers exposure to substantial market price volatility, as well as daily fluctuations. It is especially alluring for the day traders who profit from short-term price movements. The index serves as the underlying asset for a wide range of the derivative financial instruments, including futures and options, funds and exchange-traded funds (ETF).

One of the easiest ways to trade Nikkei 225, nonetheless, is through contracts for difference, or CFDs. A contract for difference allows traders to go short or long on an asset without taking ownership of it. In this case, traders speculate on the price movements.

How to trade Nikkei 225 CFDs

The Nikkei 225 offers an exceptional way to gain the access to the Japanese stock market without a need to analyse the performance of individual companies. It benefits traders as it provides them with long trading hours, a high degree of liquidity and generally tight spreads.

Trading the Nikkei stock market index is easy with CFDs. A contract for difference is a type of a contract between two parties, typically the “buyer” and “seller”, in order to profit from the price difference when opening and closing the trade. With that said, using CFDs to trade the Nikkei 225 will allow a person to go long or short on the market without having to deal with conventional exchanges.

Since the Nikkei 225 index is made up of a wide cross-section of liquid trading instruments, it has decent volatility and volume, making it very attractive to CFD traders around the world.

Nikkei 225 trading hours

The main trading hours for the Nikkei 225 are between 9:00 – 11.30, and 12:30 – 15:00 (GMT +09:00) from Monday to Friday.

If you choose to trade CFDs, you can buy and sell the shares of the Nikkei 225 Index (J225), as well as follow its prices live in JPY with the comprehensive price chart on Capital.com:

Monday to Thursday, 00:00 – 22:00 and 23.01 – 00.00

Friday, 00.00 – 22.00

Sunday, 23.01 – 00.00

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Asian Market Update – Thursday: Coins drop after South Korean crackdown; Asian stocks weaken

South Korea preparing ban on cryptocurrency trading

Cryptocurrencies ranging from bitcoin to ethereum and ripple were all down during the Asian trading session on Thursday, as news broke that the South Korean government is preparing legislation that would effectively ban cryptocurrency trading.

During afternoon trading in Asia, bitcoin was down by 7 percent for the day, after recovering from an even steeper fall earlier in the morning. The fall today means that bitcoin is back below the $14,000, a level last seen during the final days of 2020.

Ethereum also fell sharply after the news broke, before it recovered large parts of the losses later in the trading session. By 5 pm in Hong Kong, ethereum was down a slight 0.65 percent to $1,239.

Ripple XRP, which recently lost its postion as the number 2 coin to ethereum, was down by nearly 9 percent at the time of writing, after recovering from an even greater loss earlier in the morning.

Bitcoin’s silver, litecoin, was down by around 5 percent at the same time.

The news about a possible cryptocurrency trading ban out of South Korea hit the markets hard, causing most coins to sell off sharply in an immediate reaction, before recovering some of the losses.

According to Yonhap News, and quoted by CCN, South Korea’s minister of justice stated:

“The ministry is preparing legislation that basically bans any transactions based on a virtual currency through the trading floor. We have grave concerns about [the craze over] virtual currency and [a shutdown] would be one of the goals we are aiming for.”

Main Market Movers – Midday Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 23,710 -0.33%
China-Shanghai Composite Index 3,425 0.10%
Hong Kong – Hang Seng 31,120 0.15%
South Korea-KOSPI 2,487 -0.47%
Australia-ASX 200 6,068 -0.48%
S&P 500 E-Mini Futures 2,753 0.10%

Asian stocks were mixed on Thursday, with some news reports citing concerns about protectionism from the US as reason for the muted trading.

At the end of the trading day in Japan, the Nikkei 225 index was down by 0.33 percent to 23,710.

In Hong Kong, the Hang Seng Index was up a slight 0.15 percent to 31,120 at midday, making Hong Kong the brightest spot among Asian stock markets today.

In China, the Shanghai Composite Index was up 0.10 percent at midday on Tuesday to 3,425.

According to a report by the South China Morning Post, Trump may be ready to take “tough action” on trade with China. Trump has previously hinted that China has received preferential treatment from him in an effort to solve the North Korean nuclear situation. If that situation calms, all signs point to a much tougher stance on trade with China in the coming months and years.

In South Korea, the Kospi Index was down by 0.47 percent to 2,487 by the end of the trading day.

Down under, the ASX 200 was 0.48 percent lower, ending the day at 6,068.

The S&P 500 E-Mini Futures was down 0.10 percent to 2,753.

Currencies

The Japanese yen lost 0.17 percent against the US dollar as Tokyo trading ended on Thursday, changing hands at 111.59 per dollar.

The Chinese yuan lost 0.07 percent against the US dollar, trading at 6.5070 per dollar.

The loss in the yuan today came after a sharp sell-off in the US dollar yesterday, following media reports and widespread speculation that China may stop investing in US Treasury bonds. China has long been the world’s largest investor in US debt.

The Australian dollar firmed 0.34 percent on the US dollar, changing hands at 1.2707 per US dollar at the end of Australian trading.

Commodities

WTI Oil was up 0.35 percent to $63.69 per barrel on Thursday.

Brent Crude gained 0.23 percent to $69.27 per barrel.

Gold was up 0.13 percent to $1,318 an ounce.

News across Asia

In China, there are worries that Trump’s tax and trade policies may force the country to slow down the opening up of their currency and financial markets. According to Hong Kong-based newspaper SCMP, US politics and other international events may force Beijing to postpone its goal of making the Chinese Yuan a freely convertible currency, a significant shift from the current capital and foreign exchange restrictions.

Featured image from Pixabay.

Disclaimer: The author owns bitcoin, ethereum and litecoin. He holds investment positions in the coins, but does not engage in short-term trading.

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