The Tokyo stock market is expected to see selling pressure on May 8, with the Nikkei Stock Average likely to decline for the first time in three days. While the index surged by more than 3,300 points the previous day, marking a record single-day gain, concerns over the pace of the rally persist, and near-term profit-taking is likely to weigh on the market today. In European markets on the 7th, major stock indexes including Germany's DAX and France's CAC 40 were generally weak. Although geopolitical risks have receded amid growing expectations that the Iran situation is heading toward a ceasefire, profit-taking pressure emerged in the latter half of trading as investors kept an eye on the U.S. stock market. In the U.S. market, cyclical stocks and other issues declined noticeably, with the Dow Jones Industrial Average falling more than 400 points at one point. Regarding the Iran situation, uncertainty resurfaced as Iranian government officials expressed reservations about the U.S. ceasefire proposal and cited U.S. reparations as a condition for ending hostilities. The renewed strength in WTI crude oil futures also weighed on the market. However, technology stocks showed relative resilience, with the Nasdaq Composite Index declining by only 0.1%. The Tokyo market is expected to face upside resistance following the decline in U.S. and European markets, partly due to the rebound from the previous day's futures-led surge in the Nikkei. While overall trading volume is expected to remain high on the options SQ calculation day, individual stocks may see a cautious buying mood, with scenarios envisioning a pullback of about one-third of the previous day's gains, or around 1,000 points. As corporate earnings announcements accelerate, market attention is particularly focused on results from TOYOTA MOTOR CORPORATION <7203>, which will be disclosed during the afternoon trading session.

In the U.S. stock market on the 7th, the Dow Jones Industrial Average fell 313.62 dollars to 49,596.97, declining for the first time in three days. The Nasdaq Composite Index fell 32.75 points to 25,806.19.

On the schedule for today is the calculation of the Special Quotation (SQ) for May stock index options. Other releases include the Monthly Labour Survey for March, the Bank of Japan current account projection for May, and the auction of three-month Treasury Discount Bills. Overseas, data includes the U.S. employment statistics for April, U.S. business inventories and sales for March, and the University of Michigan Consumer Sentiment Index for May (preliminary).

Source: MINKABU PRESS

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