01 APR 2024

The Trade Academy Team

07:26 CET - 3 min read

Monday Morning Coffee - Markets Update - 01 Apr 2024 - Nikkei Plummets Below 40,000 Mark as New Fiscal Year Commences

Markets Update: Japan's stock market started the new financial year with a sharp decline as investors cashed in profits, despite positive economic data.

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Global Markets Roundup: 01 APR 2024

European markets are closed observing Easter Monday.

On Monday, Japan's Nikkei share average experienced a significant decline, breaching the crucial 40,000 threshold as investors opted to offload stocks to secure profits on the inaugural day of the nation's financial calendar. The Nikkei NI225 endured a 1.5% descent, settling at 39,765.22 during the midday interval subsequent to its 0.7% ascent at the opening bell. Meanwhile, the broader Topix TOPIX registered a 1.88% dip, closing at 2,716.47.

Commenting on this phenomenon, Shoichi Arisawa, the general manager of the investment research department at IwaiCosmo Securities, elucidated, "Institutional investors typically sell stocks to book profits on the first day of the financial year."Noteworthy is the Nikkei's 19% surge throughout 2024, culminating in its breakthrough of the 40,000 milestone and setting record highs in March, following a steady 54% ascent since early 2023. Chip-related entities Tokyo Electron 8035 and Advantest 6857 sustained losses of 3.34% and 4.14%, respectively, emerging as the Nikkei's primary casualties.

Toyota Motor 7203 witnessed a 4.22% decline. A closely monitored Bank of Japan (BOJ) survey revealed an upswing in business sentiment among major Japanese non-manufacturers to a peak not witnessed in over three decades during the first quarter.

The survey further unveiled projections of a 4.0% upsurge in capital expenditure by major firms in the fiscal year commencing in April, in contrast to median forecasts projecting a 9.2% increase. Additionally, both major manufacturers and non-manufacturers anticipate deteriorating conditions in the upcoming three months, as per the survey's findings. Despite the significance of the BOJ survey, analysts underscored its minimal impact on the market, attributing this to its alignment with expectations.

Heavy machinery manufacturers bore the brunt of the market downturn, with Kawasaki Heavy Industries 7012 and Mitsubishi Heavy Industries 7011 each plummeting by more than 6%, thus claiming the undesirable title of worst performers on the Nikkei. Contrary to the prevailing trend, calculator manufacturer Casio Computer 6952 experienced a notable uptick of 5.13%, emerging as the Nikkei's top performer, closely trailed by watchmaker Citizen Watch 7762, which saw a rise of 4.75%.

In the currency market, stability prevailed, offering scant guidance to local equities, as noted by Shigetoshi Kamada, the general manager at the research department at Tachibana Securities. The yen USDJPY reached a 34-year nadir against the dollar at 151.975 on Wednesday, subsequently settling at 151.345 per dollar. The euro EURUSD traded higher at $1.07945, hovering near its more-than-one-month low of $1.0769. Sterling GBPUSD traded at $1.2637, up 0.12% on the day. The global dollar index DXY was at 104.526 and remained close to the six-week high of 104.73. The offshore yuan USDCNH was pivoting around 7.2517 per dollar. Currencies down under rose, with the Australian dollar AUDUSD rising 0.21% to $0.654, while the New Zealand dollar NZDUSD was 0.20% higher at $0.599.

In commodities, Brent crude BRN1! rose 29 cents, to $87.29 a barrel. U.S. WTI crude CL1! was at $83.48 a barrel, up 31 cents, or 0.4%, following a 3.2% gain last week. Spot GOLD was up 1.2% at $2,258.71 per ounce, after hitting an all-time high of $2,259.49 earlier in the session. The most-traded May copper contract on the Shanghai Futures Exchange HG1! closed morning trade 0.7% higher at 72,810 yuan ($10,072.35) per metric ton, having notched a 5.4% rise in March, its biggest monthly gain in 16 months. The CBOT corn contract ZC1! soared 15-1/4 cents, settling at $4.42 a bushel. Benchmark May futures (CK24) reached their highest price since Feb. 9 at $4.48 and finished about 3% higher for the month, after declining the previous four months. CBOT wheat ZW1! gained 12-3/4 cents to close at $5.60-1/4 a bushel, and soybeans ZS1! lost 1 cent to $11.91-1/2 a bushel.

Looking ahead today, European markets are closed observing Easter Monday. Later in the day markets anticipate US ISM Manufacturing PMI (Mar), US S&P Global Manufacturing PMI Final (Mar).

You can view all markets data and charts here.

General news - Information source from multiple newswires.

The article and the data is for general information use only, not advice!

The Trade Academy Team