Stock prices surged higher in cautious early trading in the Japanese stock market on Wednesday. However, with participants choosing to exit counters at higher levels, the market slipped into negative territory before edging its way up a bit on selective support.
The benchmark Nikkei 225 index moved on to 9,350 in early trading but drifted down to 9,279 following a strong round of selling in some key issues. The index is currently trading at 9,306, up 7.66 points over its previous close.
In the automobile space, Suzuki Motor Corp., Hondo Motor, Fuji Heavy Industries, Hino Motors and Isuzu Motors are trading higher. Mazda Motor Corp. and Toyota Motor are trading sharply lower. Mitsubishi Motors is up with a modest gain.
Among bank stocks, Shizuoka Bank, Resona Holdings, Sumitomo Mitsui Financial Group, Sumitomo Trust and Banking, Mizuho Trust & Banking Co. and Mizuho Financial Group are trading stronger. Financial and trading stocks are also exhibiting strength.
Real estate stocks are gaining ground in positive territory. Foods, chemicals and pharmaceuticals are trading mostly firm. Steel stocks are trading mixed. JFE Holdings, Pacific Metals and Nippon Steel are trading lower, while Sumitomo Metal Industries and Kobe Steel are up modestly.
Electronic maker NEC Corp. extended overnight gains and rose to 378 yen in early trading today after the firm said it will likely swing to a 10 billion yen group net profit for the year through March. The firm had recorded a 296.6 billion yen loss in fiscal 2008.
According to the preliminary report on balance of payments released by the Ministry of Finance, Japan's current account surplus plunged 50.2% year-over-year to 12.22 trillion yen in fiscal 2008. The ministry attributed the fall to diminished investment earnings due to the weakening world economy and stronger yen. A sharp contraction in the trade balance due to slowing exports to the U.S. and Europe also contributed to the fall in surplus.
In the currency market, the Yen is trading at 96.02 to the U.S. dollar.
Among other markets in the Asia-Pacific region, Australia and New Zealand are currently trading weak. Shanghai, Singapore, Korea and Taiwan are trading firm.
Stock markets across the Asia-Pacific region had turned in a mixed performance on Tuesday. While Hong Kong's Hang Seng Index edged up 0.4 percent, Japan's benchmark Nikkei 225 Index fell 1.6 percent.
The major European markets all ended the day in the red after seeing some choppy trading. While the U.K.'s FTSE 100 Index fell 0.2 percent, the French CAC 40 Index and the German DAX Index closed down 0.5 percent and 0.3 percent, respectively.
On Wall Street, stocks rebounded to an extent and closed on a mixed note on Tuesday after spending a major part of the session in negative territory. After showing some signs of a recovery, financials lost out for the second successive session.
General Motors found the going quite tough on concerns whether the company will have a restructuring plan ready for government review by June. Yesterday GM's management indicated that it is more probable that GM will need to accomplish its goals through bankruptcy.
Shares of rival Ford also came under pressure after the automaker announced a public offering of 300 million shares of its common stock. Ford closed down 17.6 percent, pulling back further off the ten-month closing high it set last week.
In another news, Microsoft has announced that it will issue $3.75 billion of senior unsecured notes to help fund working capital requirements, capital expenditures, or share repurchases.
There was not much for the street in the form of earnings reports. In economic news, the Commerce Department released a report showing that the U.S. trade deficit for March came in wider than in the previous month, with the value of exports falling by more than the value of imports.
While the report showed that the trade deficit widened to $27.6 billion in March from a revised $26.1 billion in February, economists had expected the deficit to widen to $29.0 billion.
Additionally, the March reading is an improvement from the first quarter average through February, so it should factor favorably into the revised first quarter GDP reading. The latter point aside, the March trade balance report serves as another reminder that global trade continues to contract as countries around the globe grapple with the effects of the financial crisis.
The major averages ended the session mixed, with the Dow posting a moderate gain. While the Dow closed up 50.34 points or 0.6 percent at 8,469.11, the Nasdaq fell 15.32 points or 0.9 percent to 1,715.92 and the S&P 500 closed down 0.89 points or 0.1 percent at 908.35.
June crude oil contracts opened the pit trade at session highs. After trading below the flat line and hitting session lows of $57.81 per barrel in the afternoon, the contracts closed in positive territory at $58.85 per barrel, up 0.6%.
Economic data is likely to be in focus on Wednesday, with the Commerce Department scheduled to release its report on retail sales in the month of April. Economists expect sales to come in unchanged after falling by 1.2 percent in March.
Traders are also likely to keep an eye on monthly reports on import and export prices and business inventories as well as the weekly crude oil inventories report.
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