💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

Nikkei down on consolidation, yen's gain vs euro

Published 11/08/2010, 08:20 PM
Updated 11/08/2010, 08:24 PM

* Profit-taking weighs after gain of 6 pct in 4 sessions

* Euro's weakness hurts precision machinery shares

* Nikkei lack clear direction, technicals drive

TOKYO, Nov 9 (Reuters) - Japan's Nikkei average edged lower on Tuesday as investors took profits after its surge of more than 6 percent in the last four sessions and reflecting the yen's firmness against the euro.

Shares of precision machinery makers, which have strong business ties in Europe, lost more than 1 percent as the euro broadly weakened due to rekindling concerns over the euro zone's debt problems.

"The yen's strength against the euro is inducing some selling pressure in precision machinery shares," said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities.

The euro fell about 0.5 percent to around 112.40 yen.

By mid-morning the benchmark Nikkei was down 0.2 percent or 14.46 points at 9,718.46.

Meanwhile, the broader Topix was up 0.1 percent at 842.85.

"In general, sectors such as wholesales and machinery were put under profit-taking pressure after the Nikkei's jump of more than 6 percent in the last four sessions," Kuramochi said.

Profit-taking intensified after U.S. shares retreated from a two-year high on Monday, weighed down by financial stocks and a stronger dollar.

Still, the Nikkei lacked clear direction with investors unwilling to sell too heavily as underlying market sentiment remains bullish after it hit a three-month intraday high of 9,737.01 the previous day, traders said.

Despite the yen's strength against the euro, the Japanese currency remained well below its record high against the dollar, which was another factor to limit active selling of stocks.

The Nikkei was expected to find support around 9,650, while a series of technical sales are likely to block rises around 9,750-9,800, traders said.

The market experienced strong selling pressure when the Nikkei approached 9,750 the previous day, but a clear break beyond 9,800 -- a peak hit in July -- could trigger a series of stop-loss buying and option-related moves to pave the way for it to climb towards 10,000, traders said. (Reporting by Chikafumi Hodo; Editing by Michael Watson)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.