Image Souce: Krish Capital Pty Ltd

Index Update: On 31st October 2024, the NZ market ended in red amidst broad-based decline. On the same day, S&P/NZX 50 Index witnessed a decline of 0.44% to end the session at 12,638.900 and S&P/NZX 20 Index fell by 0.59% to 7,642.180. Also, S&P/NZX 10 Index declined by 0.59%. S&P/NZX All Communications Services encountered a fall of 2.20% to 2,305.410. However, S&P/NZX All Materials rose by 1.48%.  

Macro Update: As per the release by RBNZ, the housing market activity is subdued, with interest rates still at elevated levels. The households are showing resilience following the significant price rises and falls over the last 4 years. Residential property makes up more than half of NZ households’ wealth and the housing market directly influences financial stability, impacts consumer confidence, as well as shapes economic growth. 

Top Market Movers: Among top gainers, Metro Performance Glass Limited (NZX: MPG) witnessed a rise of 13.21% to end the session at NZ$0.060 per share and Briscoe Group Limited (NZX: BGP) increased by 5.57%. On the other hand, Greenfern Industries Limited (NZX: GFI) declined by 20.83%. 

Commodity Update: On Thursday, the yen faced pressure as the Bank of Japan maintained ultra-low interest rates. Meanwhile, the U.S. dollar consolidated ahead of key jobs data and the upcoming presidential election on November 5. Gold prices soared to a record $2,797.80 per ounce, driven by heightened safe-haven demand amid rising political uncertainty in both the U.S. and Japan. Silver dipped 0.78% to $33.81, while copper edged up 0.09% to $9,572.00 per ton. Brent crude futures rose 0.5% to $72.90 a barrel, supported by optimism over U.S. fuel demand and OPEC+ considering delaying a planned output increase. 

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Source: Trading View, Analysis: Kalkine Group  

In July 2024, the S&P/NZX 50 index surpassed both the neckline of a Head and Shoulders pattern on the daily chart and a key resistance level marked by its 2023 high. This breakout indicates that the uptrend, which started in November 2023, is likely to persist and could push the index toward its historical peak from 2021. While currently experiencing a minor pullback, the index continues to form higher highs and higher lows, reinforcing the ongoing uptrend. Furthermore, the 14-day Relative Strength Index (RSI) is hovering near its midpoint, signaling neutral market sentiment in the short term. 

Our Stance: It could be said that the broader NZ market was impacted by the decline in Communications Services segment. The investors are closely tracking the data points as they continue to look for hints that the broader economy is on healthy footing. While the earnings reports from the big companies will continue to affect broader markets, the investors are required to be cautious considering the geopolitical tensions. Moving forward, the NZ markets are expected to be broadly affected by the global equities.  

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