【Fujitomi】 Nikkei average continues to fall, shows a hesitant decline toward the close
The Nikkei stock average closed lower, finishing at 19,869.85 yen, down 14.05 yen (0.07%) from the previous Friday. As trading moved toward the close, inflows into Nikkei-type indices were observed, with about 70,000 shares traded per individual issue. Although the Nikkei index ended lower, the closing price was higher than the intraday high.
With domestic company earnings announcements nearing their end, the expected EPS (earnings per share) for the Nikkei average rose to about 1,316 yen as of the previous Friday. The expected P/E ratio fell to the low teens, in the 15x range, alleviating concerns about valuation, which helped support Japanese stocks. On the other hand, the TSE 1st Section’s advance/decline ratio (25-day average) stayed above 130%, indicating overbought conditions in the short term were still in focus.
Profit-taking selling predominated against a backdrop of geopolitical risk and a stronger yen driven by cyberattack concerns. On the 15th, the Korea Central News Agency reported that Kim Jong-un, Supreme Leader of the Workers’ Party, attended a missile launch and ordered, “Until the United States makes the right choice, manufacture more nuclear weapons and offensive means and push ahead with experimental preparations” (Kyodo News).
News reports that Japan Post Holdings was considering acquiring Nomura Real Estate Holdings sent Nomura Real Estate Holdings to a limit-up close, which boosted sentiment for other real estate stocks as well.
The TOPIX ended slightly lower, down 0.71 points (0.04%), at 1,580.0. The Tokyo Stock Exchange Prime Market (TSE 1st Section) trading value was 2.6519 trillion yen, and the trading volume was 2.15577 billion shares. The number of declining stocks in the TSE 1st Section was 1,057, rising stocks 854, and unchanged 104.
