The Tokyo stock market is expected to see buying centered on major stocks on May 1, with the Nikkei Stock Average likely to rebound. As May trading begins both nominally and substantively, buying aimed at a near-term rebound is expected to dominate following gains in European and U.S. stocks the previous day. In European markets on the previous day, major stock indices generally remained firm, with Germany's DAX, which had fallen for eight consecutive sessions, rebounding sharply, while France's CAC 40 and the UK's FTSE 100 also advanced. Risk-averse selling continued in the morning, but sentiment gradually shifted toward the upside. As crude oil prices fell back and long-term interest rates in various countries declined, speculation of an early rate hike by the ECB receded, triggering short-covering. In the U.S. stock market, the Dow Jones Industrial Average consistently pursued higher levels after opening higher, rising nearly 800 dollars, or approximately 1.6%, in a strong performance, although it lost some momentum near the close. The decline in WTI crude oil futures to around 105 dollars per barrel was also viewed positively. Individual stocks showed mixed results following earnings announcements. Among them, Caterpillar , a Dow component, surged nearly 10% on better-than-consensus earnings results, contributing to the index's gains. In addition, Alphabet was also bought up 10%, indicating strong appetite for stocks with favorable earnings. On the other hand, Microsoft saw significant downward pressure as its revenue outlook for the April-June quarter fell short of market expectations. However, bond-buying activity was notable in the U.S., as in European countries, and the decline in long-term interest rates led to improved investor sentiment. The Tokyo market is expected to follow the gains in European and U.S. stocks with upward momentum. However, the sharp appreciation of the yen following government and BOJ intervention in the foreign exchange market could have a negative impact on stocks. Today, with weekend factors also at play, the upside may become heavy after the initial buying subsides.

In the U.S. stock market on the 30th, the Dow Jones Industrial Average rose 790.33 dollars to 49,652.14, rebounding for the first time in six sessions. The Nasdaq Composite Index gained 219.07 points to 20,892.31.

On the calendar for today are the April Tokyo metropolitan area Consumer Price Index (CPI), auctions for 3-month Treasury bills and 10-year inflation-indexed government bonds, April new vehicle sales (JADA), and April mini-vehicle sales (JAMA), among others. Overseas, the April U.S. Institute for Supply Management (ISM) manufacturing index is scheduled. Markets in China, Hong Kong, South Korea, Taiwan, the Philippines, Singapore, and other Asian countries will be closed.

Source: MINKABU PRESS

*Translated by generative AI. Click here for the original article.