The markets are experiencing a further boom, and investors are buying stocks, which consequently seems to be raising stock indices and the Japanese index Nikkei 225 (JP225 on the Conotoxia platform) is taking the lead. Both the lifting of the state of emergency and another trillion yen pumped into the economy seem to help investors in their decision to buy shares.
On Thursday, Nikkei 225 rose by over 2.3%, to 21916.31 points. This is the highest level since late February. Moreover, foreign capital inflows may also be responsible for the increases. Foreign investors for the first time in 15 weeks have become buyers of Japanese shares, buying them for 386.35 bln yen net (3.58 bln USD) in the week ending May 22, according to data published by the Japanese stock exchange.
The markets seem to completely ignore another potential threat resulting from relations between the US and China. U.S. Secretary of State Mike Pompeo informed the U.S. Congress that the Donald Trump administration no longer considers Hong Kong to be an autonomous country in relation to China, because the National People's Congress is preparing to vote on new security regulations for Hong Kong even today and, according to the news agencies, this law was supposed to be passed at the time of writing this comment. Further sanctions are therefore possible.
Meanwhile, in the US the bull market seem to continue. On Wednesday, the US S&P 500 index closed above 3,000 points for the first time since March 5. Investors seem to expect a quick recovery in the economy with the lifting of lockdown restrictions. In the US, bank shares were the most popular and thus the S&P 500 index of financial companies achieved the highest rise among the main sectors. The index grew by almost 10% in the last two sessions, which means the biggest two-day growth since the first week of April.
The situation of technology companies, especially those dealing with social media, is slightly worse. Today, Donald Trump is due to sign the executive order after Twitter marked the president's tweets as potential "fake news". This could affect the technology giants and open the way for possible penalties. This in turn may adversely affect the Nasdaq index, as we saw yesterday.
Daniel Kostecki, Chief Analyst of Conotoxia Ltd. (Forex Cinkciarz.pl service)
The above comment is not a recommendation within the meaning of the Regulation of the Minister of Finance of 19 October 2005. It has been prepared for information purposes and should not constitute a basis for investment decisions. Neither the author of the study nor Conotoxia Ltd. shall be liable for investment decisions taken on the basis of the information contained in this comment. Copying or reproduction of this study without the written permission of Conotoxia Ltd. is prohibited.
66% of retail investors' accounts record cash losses as a result of trading CFDs with this provider. Consider if you understand how the CFDs work and if you can afford the high risk of losing money.
Trade this news from Conotoxia Ltd. platforms
Go to your account
