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[Tokio, 24 de Reuters]- The Nikkei average suddenly rebounded on the Tokyo Stock Exchange for the first time in 4 days. After the bubble burst on the 17th, the high price of 26,057.3 yen was renewed.
The opinions of market participants are as follows.
● Expectations rise due to the increase in market prices and year-end highs.
Pfizer, a major US pharmaceutical company, in early NovemberPFE.NWhen it announced that it had confirmed its effectiveness in a clinical trial of a new coronavirus vaccine, there was a move to sell the value stocks that had been sold so far, while the growth stocks that had been bought were being sold. However, the current stock market has seen an overall rise, and top stocks, high-tech-related stocks, and economy-sensitive stocks are also strong, and seller buybacks are driving the market. There is the impression that it is a bit fast, but when it goes up, it is the stock market that goes up for no reason.
Although this year’s turmoil in the market was something that was triggered by the new coronavirus, the industry often grew in the wake of the corona. Although business performance is declining in this period, there is no sense of overheating in the valuation given the prospect of recovery in the next period. The Nikkei average has reached a new record after the bubble burst today, and there are no lumps in the past.
We believe the bull market will continue in the form of value stocks catching up with growth stocks. Foreign investors have been selling since the beginning of the year and there is ample purchasing power in terms of supply and demand. Also, there is a trend of net purchases from November to December and share prices tend to rise. The environment for high stock prices is in place and expectations are rising towards year-end highs.
● It continues to increase until the sell position is resolved.
In short, it has become a completely tiered market. The vaccine development expectations are good news, but on the other hand, the domestic factor is the temporary exclusion from the GoTo campaign, and it is not surprising that related stocks are sold, but it has increased to these. Even if you look at this point, it can be said that it is a rising market that cannot be explained in theory.
Behind this is the elimination of accumulated short positions. Even if a weak technical index comes on, the seller will not be able to support it because it will be a strong move that will immediately pull back. The unsold amount of the arbitrage is expected to be removed for the SQ (Special Compensation Index) calculation in December, and there seems to be a lot of room for a hike when looking only at the supply and demand side.
Given the sharp rally so far, it’s clear we’ve hit the scene of exploring the buying climax, but that’s hard to read as there are investors making new shorts on the short cover. It appears that the stock price will peak once the sell position has been closed to some extent. Until then, it is expected to continue to rise.
● Vaccine bubble with excess money as a foothold, caution against optimism
The post-bubble high of the Nikkei average can be said to be a vaccine bubble that relies on surplus money from the central bank’s monetary easing. The bright news about the development of the new coronavirus vaccine came out earlier in the week for the third week in a row, with the higher price continuing to update.
Monetary easing by the central bank is almost certain to continue in the future, so if any negative material comes out in the vaccine talk, it could be a trigger to enter the tightening phase. A lot of attention needs to be paid to the vaccine because its persistence and side effects are very often unknown. I’m careful to lean into optimism as if the Corona crisis is over, as jumping into the bright news may cause me to lose my foothold somewhere.
However, under continued monetary easing, even if the stock price plummets for some reason, there is a high possibility that the purchases will be made at the lowest price, and the large stock market composition of “frustration in the high price range “will not change. Let’s go.
