Posted on 06/23/2002 5:10:53 PM PDT by DeaconBenjamin
Tokyo stocks will likely move lower next week as the slump on Wall Street continues to pressure leading issues, but many analysts are predicting the key Nikkei index will remain above the psychologically-important 10,000 line.
Analysts predict the 225-issue Nikkei Stock Average will move between 10,000 and 10,800 next week, after trading between 10,325.55 and 10,888.04 this past week.
The bellwether index ended the week at 10,354.35, its lowest close since Feb 26. The figure was down from the previous week's finish of 10,920.63, the lowest close since March 1.
The broader Tokyo Stock Price Index (TOPIX) of all First Section issues on the Tokyo Stock Exchange finished the week at 1,002.35, the lowest finish since Feb 26.
Market players will likely refrain from active trading next week, given lingering concerns over Wall Street's prospects and perceived weakness in Japan's planned economic reform blueprint, which brokers say lacks measures to put the economy on a sustainable recovery track.
Analysts said investors and brokerage dealers will continue to see few buying incentives next week, but that players are also short of good reasons to sell more stocks to test the Nikkei's downside below the 10,000 line.
The appetite for bargain-hunting among institutional investors will likely increase when the Nikkei nears the 10,000 level, they said.
"Recent stock price falls were a bit too steep. Stocks will likely rebound moderately next week for technical reasons and the Nikkei will probably not fall below the 10,000 line," said Masatoshi Sato, a senior strategist at Mizuho Investors Securities Co.
The summit of the Group of Eight (G-8) major nations, to be held in Canada on Wednesday and Thursday, is unlikely to produce any trading incentives as world leaders will mainly be discussing ways to assist African development.
But Tsuyoshi Segawa, equity general manager at Shinko Securities Co, said the G-8 summit could provide reasons to buy U.S. stocks if the United States uses the occasion to issue a strong warning to countries that support terrorism and to suggest possible military action.
In New York, stocks have been falling for several weeks on a string of bearish corporate earnings outlooks, fears of further terrorist attacks and uncertainties over the situation in the Middle East.
In recent sessions, the blue-chip Dow Jones Industrial Average and the tech-laden Nasdaq composite index have repeatedly logged their lowest closing levels this year.
Meanwhile, investors in Tokyo have become increasingly skeptical about the soundness of structural reform initiatives proposed by the administration of Prime Minister Junichiro Koizumi, analysts said.
"The government's antideflation package, with tax reform at its core, has not boosted the stock market at all, as it contains virtually no measures for stimulating the economy," said Hiroichi Nishi, senior analyst at Nikko Cordial Securities Inc.
"This gave the market the impression the reform has taken a step backward and that the government eventually eyes a tax hike," he said.
The package, which was adopted Friday by Koizumi's Council on Economic and Fiscal Policy, is slated for approval by the cabinet Tuesday in time for the G-8 summit.
Some brokers said a series of shareholders meetings next week may provide the Tokyo market with some stability as companies do not want their stocks to be volatile around the annual gatherings.
In the past week, average daily trading volume on the Tokyo Stock Exchange was 746.57 million shares on the First Section, down from 829.08 million shares a week earlier.
Sumitomo Mitsui Banking topped all issues in volume terms, closing the week at 582 yen, down 71 yen from the preceding week's finish, on a turnover of 180.09 million shares.
Nippon Steel was second, ending the week at 191 yen, down 1 yen, on a turnover of 73.19 million shares.
Hitachi ranked third, closing the week at 766 yen, down 37 yen, on 68.98 million shares traded.
Nikko Cordial came fourth, ending the week at 574 yen, down 76 yen, on 60.70 million shares traded.
Nomura Holdings followed, ending the week at 1,665 yen, down 201 yen, on 60.55 million shares traded.
The next five leading shares in volume terms were Toshiba, Nissan Motor, Daiwa Bank Holdings, Mitsubishi Heavy Industries and Daiwa Securities Group. (Kyodo News)
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