RTTNews - After a positive start and a subsequent surge, the Japanese stock market has given up some of the gains due to profit taking on Wednesday morning. With U.S. markets reporting choppy trades on Tuesday and more economic data to hit the market later on in the day, investors appear to have turned somewhat cautious.
The benchmark Nikkei 225 Index, which opened at 9,723.82 and moved on to 9,774.01 earlier in the morning, is currently up by 26.66 points at 9,730.97. The Nikkei had ended at 9,704, up 26.56 points, on Tuesday.
Construction and foods stocks are trading mixed. Automobile and bank stocks are also exhibiting a mixed trend. Steel, metals, non-ferrous metals, machinery, pharmaceuticals and chemicals stocks are mostly trading firm. Real estate stocks are also edging higher.
Mitsubishi UFJ Financial Group Inc. has announced that it will provide 43 billion yen in additional capital to Morgan Stanley, responding to the U.S. banking group's public offering. The move will enable MUFG to keep its stake above 20% in terms of voting rights. The Mitsubishi UFJ Financial Group stock, which rebounded from lower levels earlier in the day, is currently trading in the red with a modest loss.
A syndicate of Japan's three biggest banks and the state-backed Development Bank of Japan are planning to lend about 100 billion yen to Japan Airlines Corp. as early as this month. The DBJ is expected to put up tens of billions of yen, with Mizuho Corporate Bank contributing a similar amount. Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corp. are seen providing several billion yen each. JAL will use the loan to shore up its short-term cash position, according to sources familiar with the matter.
The airline had sought to borrow up to 200 billion yen from the DBJ under a government program of low-interest financing for cash-starved companies. That would have catapulted the bank into the role of JAL's biggest creditor. Avoiding such a situation appears to be one of the syndicate's aims. The JAL stock is currently trading with a modest gain.
In another corporate news, Nippon Mining Holdings Inc. is set to make a strong comeback with production picking up for cell phone parts and electronic materials for LCD Panels. The Nippon Mining Holdings stock is currently trading nearly 3% up.
The output of Nippon Mining & Metals Co., which handles the group's metals operation and is a leading manufacturer of indium tin oxide targets used for making layers that control light on LCD panel surfaces, had plunged by half on year in the January-March term when demand tumbled. However, as a result of completed inventory corrections at LCD panel producers amid robust Chinese demand for electronics, output from the company has started increasing again in April and is now approaching the level seen a year earlier, when production facilities were operating at full capacity.
The U.S. dollar traded in the lower 95 yen zone early Wednesday in Tokyo, down from its levels overnight in New York. In early trading, the dollar fetched 95.42-47 yen against 95.70-80 yen in New York and 96.50-52 yen in Tokyo at 5 p.m. Tuesday. Currently, the yen is trading at 95.62 to the U.S. dollar.
Among other markets in the Asia-Pacific region, Australia has edged up after a subdued start. The New Zealand market is also trading higher. Singapore is up modestly, while Shanghai, Taiwan and Korea are trading lower.
On Wall Street, stocks extended their winning streak to a fourth successive session on Tuesday with traders reacting positively to the better-than-expected pending home sales numbers for the month of April.
The major averages ended the day modestly higher, although well off their best levels of the day. The Dow finished up by 19.43 points or 0.2 percent at 8,740.87, the Nasdaq closed up 8.12 points or 0.4 percent, at 1,836.80 and the S&P 500 finished up by 1.87 points or 0.2 percent at 944.74.
In the Asia-Pacific region, stock markets finished on a mixed note with profit taking wiping off early gains. Major European markets also turned in a mixed performance. The French CAC 40 Index slipped by less than a tenth of a percent, while the German DAX Index rose by a minute margin. The U.K.'s FTSE 100 Index dropped by 0.7 percent.
Oil prices were flat on Tuesday amid choppy trading as investors awaited the Energy Information Administration's weekly inventory report. Crude oil prices finished at US$68.55 per barrel, down US$0.03 on the choppy session. Prices touched as high as US$69.05 after hitting a low of US$67.50.
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