Nikkei 225, Kospi and Nifty 50 Forecasts – Asian Indices Continue to Look for Higher Levels

Nikkei 225 Technical Analysis

The Nikkei 225 has rallied pretty significantly during the Friday session as the market continues to see pretty significant momentum coming into the market. I think ultimately this is a market where you have to look at the P/E ratio of 24.4, which is no longer cheap by historical standards.

The 10-year yield in Japan is climbing, basically to 2.5%, creating the first real competition for equities in decades. That being said, the Nikkei 225 continues to grind higher despite the fact that the Bank of Japan is expected to raise rates in July. Tech and information continue to lead the Nikkei higher while automotive and mining are lagging due to shifting currency dynamics in the Japanese Yen and energy costs.

Kospi Technical Analysis

The KOSPI gapped lower to kick off the Friday trading session, only to turn around and show signs of strength. The KOSPI has been one of the biggest performers out there and, in fact, has recently overtaken Canada to become the 7th largest equity market in the world.

With companies such as Samsung Electronics pushing higher due to the artificial intelligence boom, South Korea remains a major winner. The 7,000 level below, of course, is a major support level, but we’re really here at the 7,500 level, so I think that is probably something that will be difficult to get down to test anytime soon.

The Middle Eastern conflict is a major headwind for South Korea, given its extreme dependence on energy imports, but as things have gone recently, you can see that they are looking past that.

Nifty 50 Technical Analysis

The Nifty 50 in India continues to see a lot of noisy behavior. It’s hanging around the 50-day EMA, which has also been backed up by a strong support zone near 24,000. A breakout above the 24,500 level really gets this thing moving, and it’s worth noting that the 7.4% GDP growth estimate for this year will help India in the long term.

At a P/E valuation of 21.2, it’s considered to be fairly valued and maybe that’s why you’re starting to see a little bit of chop and noise in this particular market. Despite the recent couple of days dipping, the 7% GDP growth provides a fundamental floor that the other indices in this video lack, so eventually I expect the Nifty 50 to start rising again.

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