Japanese shares may succumb to profit-taking next week following strong gains on a slew of positive earnings reports and news of a major steel industry merger plan, dealers said Friday. In the week to February 4, the benchmark Nikkei index at the Tokyo Stock Exchange rose 1.77 percent, or 183.18 points, to 10,543.52.
The Topix index of all first section shares added 1.7 percent, or 15.67 points, to reach 935.36 over the week. The index was lifted Friday by steel shares, which soared after the country's biggest steelmaker Nippon Steel and rival Sumitomo Metal Industries unveiled a merger plan to create the world's second-largest steel firm.
Nippon Steel and third-ranked Sumitomo Metal announced Thursday that they plan to achieve the tie-up by 2012, which would create a steel giant second only to the world's biggest, ArcelorMittal, based in Luxembourg.
Meanwhile, "robust earnings may continue lifting sentiment for some time," said Seiichi Suzuki, strategist at Tokai Tokyo Securities. But he warned Japanese shares may face inevitable downward pressure as investors take profits, expecting the Nikkei index to range between 10,450-10,650 next week.
"Some investors may start selling because it may be a good time to take profits after a series of positive earnings reports. The market may get mixed," he said.
Key US jobs data to be released Friday will set the tone for the coming week, analysts said, amid expectations that disappointing figures will lead to a slide in the Nikkei when investors get their first chance to react Monday. "Market expectations for a speedy recovery of the US economy are at a very high level that exceeds actual conditions," Daisuke Uno, chief strategist at Sumitomo Mitsui Banking Corp, told Dow Jones Newswires. "The US jobs data will likely reflect (that gap)," he warned.
Comments
Comments are closed for this article.