Japanese Stock Futures Fall Amid Speculation of Excessive Gains

Strategic Insights -

Japanese stock futures declined on concerns that gains driving benchmark indexes to their highest levels since October 2008 may be unsustainable, given the outlook for earnings. Australia's gold producers, including Newcrest Mining Ltd., the country's largest gold producer, also declined. This comes as investors may be selling shares to lock in profits, with stocks trading at a relatively high level, according to Hiroichi Nishi, an equities manager at Nikko Cordial Securities Inc.

Key Takeaways:

  • Japanese stock futures fell as investors speculate that gains may be excessive given the outlook for earnings.
  • Australian gold producers, including Newcrest Mining Ltd., declined as prices of gold dropped.
  • Investors may sell shares to lock in profits as stocks trade at a relatively high level, according to Hiroichi Nishi, an equities manager at Nikko Cordial Securities Inc.
  • Japan's Nikkei 225 Stock Average rose 1 percent to its highest level since October 2008, but was valued at 39 times estimated earnings, the highest level among equity markets worldwide.
  • The 25-day Toraku index, a measure of daily stock winners and losers in Tokyo, reached 137, a level suggesting the market may be overheating.
  • Futures on the Nikkei expiring in June closed at 11,115 in Chicago, compared with 11,120 in Singapore, and were bid at 11,100 in Osaka, Japan, at 8:05 a.m. local time.
  • Australia's S&P/ASX 200 Index dropped 0.1 percent at the open in Sydney, while New Zealand's NZX 50 Index was unchanged at 3,249.65.
  • The MSCI Asia Pacific Index has gained 4.5 percent this year, compared with increases of 5.2 percent for the S&P 500 and 3.9 percent for the Stoxx Europe 600 Index.

Statistics:

  • Japanese stock futures fell 1.1 percent.
  • Newcrest Mining Ltd. lost 0.8 percent as prices of gold dropped.
  • The price of stocks in the Nikkei 225 Stock Average climbed to 39 times estimated earnings on average.
  • The 25-day Toraku index reached 137.
  • Futures on the Nikkei expiring in June closed at 11,115 in Chicago.
  • The MSCI Asia Pacific Index has gained 4.5 percent this year.
  • The S&P 500 Index was little changed as consumer confidence increased more than projected and home prices unexpectedly rose in January.
  • Gold futures for June delivery fell 0.5 percent in New York, halting a three-session rally.

Sources:

  • Bloomberg
  • Nikko Cordial Securities Inc.
  • Euclid Infotech Pvt. Ltd.
  • Syndigate.info
  • Albawaba.com