Nikkei off 0.5%, retreats from 6-month high

Tokyo: Japan's Nikkei share average stepped back from six-month highs on Tuesday morning, with a bounce in the yen denting exporters while financials retreated after their recent earnings-led rally.

The Nikkei dropped 0.5 percent to 15,082.35 in mid-morning trade, moving away from 15,273.61 hit on the previous day, the highest since May 23 when it reached a 5-1/2 year high of 15,942.60.

The broader Topix shed 0.5 percent to 1,236.06.

"Investors have started becoming risk on, but the market has risen too fast so they are staying cautious until there are more cues about Fed's tapering," said Takuya Takahashi, a strategist at Daiwa Securities.

Markets continue to watch out for any clues as to when the U.S. Federal Reserve will start unwinding its $85 billion-a-month stimulus programme, although many in the markets now see any move unlikely until March.

Financials lost ground after rising on Monday on their recent strong earnings. Sumitomo Mitsui Financial Group (8316.T) shed 1.7 percent, while Mitsubishi UFJ Financial Group (8306.T) declined 0.9 percent and Mizuho Financial Group (8411.T) slid 0.5 percent.

Exporters were weaker after the dollar pulled back against the yen, reflecting expectations the Fed will maintain its easy-money policy for a while longer after dovish comments last week from incoming Fed chief Janet Yellen.

Toyota Motor Corp (7203.T) dropped 0.5 percent and Advantest Corp (6857.T) fell 1.7 percent.

The yen was up 0.1 percent at 99.925 yen to the dollar, adding to a 0.2 percent rise overnight to end a two-day run of losses.

Last week, the yen hit a two-month low of 100.315 yen to the dollar, driven by a risk-on mode in global markets and comments from Finance Minister Taro Aso that Tokyo should retain currency intervention as a policy tool. The Nikkei gained 7.7 percent last week, it's biggest weekly rise in four years.

A weaker yen sharpens Japanese exporters' competitiveness overseas and bumps up their dollar earnings when repatriated.

The Nikkei has rallied 45 percent this year, driven by the government's expansionary fiscal and monetary policies.

Markets bounce back, Sensex ends up 405 points

Markets ended higher on Thursday, following the expiry of August derivative, tracking a rebound in the rupee after the Reserve Bank of India decided to provide dollars directly to oil companies.

The ones leading the gains in Thursday's trade were oil & gas major Reliance Industries along with HDFC, ITC, TCS and HDFC Bank.

The Bombay Stock Exchange’s 30-share Sensex closed at 18,401 up 405 points. The National Stock Exchange’s 50-share S&P CNX Nifty closed at 5,409 up 124 points.

In the broader markets, the midcap index advanced 1.5% and the smallcap index gained 0.7%, both underperforming as compared to the 2.2% gain see on the BSE benchmark index.

Global Markets

Asian shares recouped some of the two previous sessions' steep losses on Thursday as fears abated that US-led forces would soon launch a military strike on Syria, and oil prices retreated from a six-month peak.

Emerging market currencies stabilised after their recent battering, with the Indian rupee coming off a record low after the central bank moved to provide dollars directly to oil companies, offering the currency some relief.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 1% after falling 2.2% in the previous two sessions.

Japan's Nikkei share average advanced 0.8% in light trade, helped by the safe-haven yen giving up some of the recent gains that had taken it to a three-week high against the dollar.

European shares too started trading in the green ahead of consumer price data. FTSE 100, CAC and DAX were up 0.1-0.4%.

Rupee

The rupee gained against the dollar today after the Reserve Bank of India announced measures late Wednesday to curb rupee fall through dollar flows.

At 1600 hrs, the partially convertible rupee was trading at 67.31 per dollar against the Wednesday’s close of 68.80/81, when it hit a record low of 68.85.

Sectors & Stocks

All the sectoral indices closed in the green with gains of atleast 0.4%. Oil & Gas, Metal, FMCG, Capital Goods and Auto indices added 2-3% and were the top sectoral gainers.

Power, Bankex, Health Care, Teck, Consumer Durables and PSU indices, too were up 1-1.8%.

The only losers among the Sensex-30 were Coal India down 1.6% along with SBI, Tata Power, Tata Steel, Infosys and Cipla which lost 0.3-0.6%.

Metal names like Sesa Goa, Hindalco and Jindal Steel were up 2-13.5%.

From the financial space, HDFC, HDFC Bank and ICICI Bank gained 1.3-5.7%.

Reliance Industries up 4.2% was top gainer from the Oil & Gas pocket along with Gail India and ONGC up 2% each.

FMCG heavyweights, ITC and HUL were also up 2% each.

Tata Motors, Mahindra & Mahindra, Maruti Suzuki, Hero MotoCorp and Bajaj Auto were the movers in the auto segment, adding 0.6-2.6%.

Bharti Airtel, Dr Reddys Lab, NTPC, BHEL and L&T which added 2.5-4% were the other notable gainers.

The market breadth was very positive owing to the strength in broader markets. 1,275 stocks advanced while 989 stocks declined on the BSE. Jinsy Mathew in Mumbai