In the morning session on the 29th, the following three points should be noted.

■ To observe the resilience after the selling phase and the market development.

■Futodent, 2Q upward revision of operating profit 0.219 billion yen ← 0.141 billion yen

■ Morning session focus: Daiichi Kogyo Seiyaku, chemical synthesis with light, demonstrated in Shiga.

■ To observe the resilience after the selling phase and the market development.

In the Japanese stock market on the 29th, it seems that the market development will be to determine the firmness after the round of selling. In the US market on the 28th, the NY Dow was down 159 points and the Nasdaq was down 198 points. Selling of position adjustment ahead of Nvidia's earnings report became dominant. One corner of defensive shares was bought, and although there were moments when the NY Dow temporarily rose, selling pressure on high-tech stocks became a burden. The settlement price of the Chicago Nikkei 225 futures was 38,140 yen, down 230 yen from Osaka. The exchange rate is fluctuating around 144.30 yen per dollar.

As a result of the futures following Chicago, it is likely that selling will lead the way. In addition, Nvidia announced its earnings after the close of trading. The revenue outlook exceeded expectations, but there were moments in extended hours trading when it temporarily dropped by about 8%, and given the anticipated decline in the US market on the 29th, it is likely that selling will strengthen in the morning. However, the cautious attitude was stronger than the expectation for Nvidia's earnings report. The trading volume on the Tokyo Stock Exchange Prime has been consistently around 1.3 billion shares daily since August 21, and active trading has been restrained.

Therefore, there is likely to be a short-term selling pressure led by futures, but there may be an awareness of buy orders waiting for a dip to aim for a rebound in the face of downward pressure. Also, in the mood to assess the movements of the US market, the scope for actively initiating selling is likely to be limited, so while assessing the firmness after the round of selling, it would be ideal to respond with buy orders when there are dips.

In terms of stock selection, high-tech stocks are likely to be avoided, but there may be an awareness of potential rebounds, considering that stocks like Tohoku Electric <8035> have been in a continued slump. Also, similar to the US, there are likely to be easy buys in some defensive shares. Furthermore, if the Nikkei average remains unstable below 38,000 yen, individual funds are likely to lean towards short-term trading in small and mid-cap stocks aiming for short-term price fluctuations.

Furthermore, it is likely to be a market development aimed at anticipating the futures of US stocks by GlobeX, so if the Nasdaq 100 futures show signs of sluggishness, it is likely that buy orders waiting for dips will strengthen.

■Futodent, 2Q upward revision of operating profit 0.219 billion yen ← 0.141 billion yen

Futudenki <6654> announced a revision of the second quarter financial estimates. The revenue is revised upward from 188.4 billion yen to 199 billion yen, and the operating profit from 14.1 billion yen to 21.9 billion yen. Regarding the revenue, due to the recovery of product demand following the end of the COVID-19 pandemic and the impact of overseas geopolitical risks, the procurement difficulties for electronic components were resolved, resulting in an increase in revenue for some electronic application equipment. On the profit side, in addition to the increase in revenue, it is expected that the incurrence of some expenses will be delayed until the third quarter and beyond.

Materials of concern in the morning session

The Nikkei Average rose (38,371.76, +83.14).

Expectations for inflation to ease in the US.

Active share buybacks

Request for improvement in corporate value by the Tokyo Stock Exchange.

- Daiichi Kogyo Seiyaku Co., Ltd. <4461> chemically synthesizes chemicals using light, demonstrating in Shiga.

- Rhythm <7769> dissolves the US watch sales company to promote structural reforms.

- Kirin Holdings Co., Ltd. <2503> extends the TOB period for Fancl.

- TPR <6463> establishes a development base in the Tokyo metropolitan area, expanding into new areas such as EV components with a scale of 100 people.

- SUBARU <7270> installs local 5G equipment at its test site, a first for a domestic automaker.

- Tokokotake <6617> conducts an EV charging demonstration for hourly rental parking lots with Park24 and others, next month in Kawasaki.

- Denso Corporation <6902> manufactures hydrogen generation equipment components under contract with a British company.

- Komatsu <6301> collaborates with a Brazilian company to develop an aftermarket engine for hybrid fuel super large dump trucks.

- Chino <6850> improves the high emissivity blackbody furnace by expanding the calibration temperature range.

- Mitsubishi Heavy Industries <7011> receives an order for gas turbines for cogeneration in Saudi Arabia.

- Topcon <7732> partners with a French startup to advance remote diagnosis for ophthalmology.

- Hitachi <6501> focuses on the development of smart buildings, targeting small and medium-sized markets overseas.

- Fujitsu <6702> aims to achieve quantum supremacy with tens of thousands of qubits in collaboration with Osaka University.

- Rohm <6963> supplies power semiconductor modules for electric vehicles in China.

- Ricoh <7752> creates an immersive environment for enhanced communication in next-generation conference rooms.

- Mitsubishi Electric Corp. Unsponsored ADR (6503) uses vibration power generation elements to power IoT devices.

- Kurimoto Iron Works Co., Ltd. (5602) and Takonaka Construction Co., Ltd. are developing environmentally friendly concrete using recycled and reused aggregates.

- Nippon Light Metal Holdings Co., Ltd. (5703) is developing terminal parts for lithium-ion batteries using metal and resin joining technology.

- Sumitomo Chemical Co., Ltd. (4005) is accelerating the development of environmentally friendly devices using strongly correlated electronic materials in collaboration with the University of Tokyo.

☆ Schedule of events in the morning session

Not applicable.

Not applicable.