Nikkei books biggest weekly gain in three months
Sunday, 20 June 2010
TOKYO, June 19 (Reuters): Japan's Nikkei average closed flat Friday but chalked up a three-per cent gain for the week, its biggest weekly rise in three months, with foreign investors starting to tiptoe back into the market.
The benchmark average, which stayed within a sight of a one-month high hit earlier in the week, moved in and out of negative territory throughout the day, with support holding near its 25-day moving average of 9,800.
Market players said that as risk avoidance ebbs, the market looks poised to move slowly higher. The Nikkei faces resistance near 10,200, about where the Nikkei's 50-week moving average comes in, and around 10,300, its 200-day moving average.
"There was talk today that US money may have been buying early this morning, perhaps pension funds, and that foreign selling may have largely run its course last week," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.
"The Nikkei may now start to move slowly upwards, particularly as the end of the quarter approaches and investors start to look towards quarterly results."
Other analysts said European investors also appeared to be buying a bit Friday, though trade remained thin.
Foreign investors sold a net 916.9 billion yen ($10 billion) of Japanese stocks last week, compared with the 75.2 billion yen they sold in the previous week and the biggest outflow in a single week since March 2008, finance ministry data showed.
"It appears some Europeans may be buying today, with worry about the euro zone debt situation having eased after the Spanish bond auction, which also helped buoy the euro," said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities.
"But given how long it's likely to take to solve all the euro zone problems, uncertainty will remain," he added, noting that it will take some time for foreign investor buying to really recover.
A robust response to a Spanish debt auction soothed worries about the country's finances and helped send the euro to a three-week high Thursday, levels near which it was holding steady Friday.
The benchmark Nikkei ended down 4.38 points at 9,995.02, after earlier inching up 0.3 per cent to 10,029.11. That was near a one-month high of 10,109.86 hit Wednesday.
The index has gained about two per cent so far this month, though it is down more than five per cent since the beginning of the year, which compares with a 3.5-per cent fall in the MSCI Japan Index.
The broader Topix slipped 0.3 per cent to 884.64 Friday.
Before the 10,200-10,300 resistance levels, a 38.2-per cent retracement from the Nikkei's April high of 11,408.17 and its June low of 9,378.23 comes in around 10,156.
Some analysts say a break above 10,200-10,300 could take the Nikkei quickly up to 10,500.
Trade was thin on the Tokyo exchange's first section, with 1.6 billion shares changing hands, near a four-month low just below 1.5 billion shares marked early this week.
The benchmark average, which stayed within a sight of a one-month high hit earlier in the week, moved in and out of negative territory throughout the day, with support holding near its 25-day moving average of 9,800.
Market players said that as risk avoidance ebbs, the market looks poised to move slowly higher. The Nikkei faces resistance near 10,200, about where the Nikkei's 50-week moving average comes in, and around 10,300, its 200-day moving average.
"There was talk today that US money may have been buying early this morning, perhaps pension funds, and that foreign selling may have largely run its course last week," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.
"The Nikkei may now start to move slowly upwards, particularly as the end of the quarter approaches and investors start to look towards quarterly results."
Other analysts said European investors also appeared to be buying a bit Friday, though trade remained thin.
Foreign investors sold a net 916.9 billion yen ($10 billion) of Japanese stocks last week, compared with the 75.2 billion yen they sold in the previous week and the biggest outflow in a single week since March 2008, finance ministry data showed.
"It appears some Europeans may be buying today, with worry about the euro zone debt situation having eased after the Spanish bond auction, which also helped buoy the euro," said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities.
"But given how long it's likely to take to solve all the euro zone problems, uncertainty will remain," he added, noting that it will take some time for foreign investor buying to really recover.
A robust response to a Spanish debt auction soothed worries about the country's finances and helped send the euro to a three-week high Thursday, levels near which it was holding steady Friday.
The benchmark Nikkei ended down 4.38 points at 9,995.02, after earlier inching up 0.3 per cent to 10,029.11. That was near a one-month high of 10,109.86 hit Wednesday.
The index has gained about two per cent so far this month, though it is down more than five per cent since the beginning of the year, which compares with a 3.5-per cent fall in the MSCI Japan Index.
The broader Topix slipped 0.3 per cent to 884.64 Friday.
Before the 10,200-10,300 resistance levels, a 38.2-per cent retracement from the Nikkei's April high of 11,408.17 and its June low of 9,378.23 comes in around 10,156.
Some analysts say a break above 10,200-10,300 could take the Nikkei quickly up to 10,500.
Trade was thin on the Tokyo exchange's first section, with 1.6 billion shares changing hands, near a four-month low just below 1.5 billion shares marked early this week.