Key Points:
- Nikkei 225 closed at 36,164.15, down 0.47%, hitting a session low of 35,969.15.
- Tech stocks led the decline, mirroring Wall Street’s overnight losses.
Nikkei 225 Extends Decline Amid Weak Global Sentiment
The Nikkei 225 dropped 0.47% on Tuesday, closing at 36,164.15, as traders pulled back from risk assets amid a tech-led selloff. The index reached an intraday high of 36,402.15 before sliding to a low of 35,969.15, extending its downward trajectory from previous sessions.
Market sentiment remained cautious, reflecting weakness in global equities, particularly in the United States, where inflation concerns and trade tensions fueled volatility.
Technology Stocks Lead the Drop
The selloff in technology stocks dragged the market lower, with semiconductor and electronics firms facing pressure as traders reduced exposure to the sector, mirroring declines in US chip stocks. Telecommunications and investment firms also saw losses, as traders moved to secure profits following recent rallies.
Meanwhile, consumer and retail stocks followed the broader market downturn, reflecting cautious sentiment. In contrast, industrial and defensive sectors provided some stability, with select stocks in manufacturing and consumer staples posting modest gains.
Technical Analysis
The Nikkei 225 is down 0.47%, reflecting ongoing selling pressure. The index opened at 36,335.65 and closed at 36,164.15, with a high of 36,402.15 and a low of 35,969.15. The moving averages (5, 10, 30) are sloping downward, confirming the bearish trend, while the MACD remains in negative territory, signaling continued downside momentum.
Picture: Nikkei 225 extends losses as bearish momentum builds, as seen on the VT Markets app
For potential recovery, resistance is seen near 36,400, and a break above this level could signal a move toward 36,700-37,000. However, if the decline continues, support at 35,969 will be crucial, as a break below could open the door for further losses toward 35,800. Traders should watch for global market sentiment, U.S. economic data, and Bank of Japan policy updates, as these will impact future movements.
With the index now trading near its lowest levels since September 2024, traders are focused on upcoming US inflation data and central bank decisions, which could dictate future market direction.
If the selloff in global tech stocks continues, the Nikkei 225 could test further downside levels, with support around 35,900. However, any stabilisation in US equity markets may provide relief to Japanese stocks in the short term.
