Market Watch: Nikkei 225 Climbs, S&P 500 Breaks New Ground

Market watch: Nikkei 225 hits record high; FTSE 100 struggles; S&P 500 breaks new ground. Global markets face mixed signals.

The global stock market landscape presents a mixed picture as the Nikkei 225 reached yet another milestone, while the FTSE 100 struggles to gain traction and the S&P 500 notches up fresh record highs.

The Nikkei 225, Japan’s benchmark index, soared past the psychologically significant 40,000 mark again, driven by the stellar performance of tech and AI stocks like Tokyo Electron. A shift towards tech nearshoring and foreign funds redirecting investments from Chinese to Japanese markets fuels this surge. However, analysts caution that risks such as China’s economic fluctuations, potential strengthening of the yen, and changes in the Bank of Japan’s policy stance could temper the index’s upward trajectory. Additionally, concerns about the index’s overbought levels loom, suggesting a potential minor retracement to previous highs.

Market Watch: Nikkei 225 Climbs, S&P 500 Breaks New Ground

Meanwhile, the FTSE 100, the UK’s leading stock index, is facing hurdles in its recovery, struggling to breach the 7,710 to 7,769 resistance region. Despite rebounding from last week’s low of 7,596, the index still needs to reach critical levels, including the early February high at 7,710 and the subsequent high at 7,717. Analysts highlight the importance of exceeding these levels to pave the way for a sustained upward movement toward the significant resistance area between 7,750 and 7,769, comprising highs from December to February. Nevertheless, minor support levels are identified between Friday’s low and the 55-day simple moving average, providing some cushion for potential downside moves.

The S&P 500 continues its relentless ascent in the United States, nearing the 5,150 mark and setting another record high. This surge precedes pivotal events such as Federal Reserve Chair Jerome Powell’s upcoming testimony and crucial US labor data, driving investor optimism. Analysts point to the 5,200 zone as the next primary target for the index, with support levels seen around the 23 February high at 5,111 and the February-to-March uptrend line at 5,088.

As markets navigate a maze of economic data and geopolitical developments, investors remain cautiously optimistic but vigilant against potential headwinds that could sway the current bullish sentiment.

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