Image Source : Krish Capital Pty Ltd

Index Update: On 16th January 2025, the broader NZ market closed the trading session in green amidst buying in the IT sector. On the same day, S&P/NZX 50 Index witnessed a rise of 0.44% to end the session at 13,000.670 and S&P/NZX 20 Index increased by 0.35%. Also, S&P/NZX 10 Index rose by 0.31%. S&P/NZX All Information Technology encountered an increase of 3.05% to close at 2,914.800. However, S&P/NZX All Materials witnessed a fall of 1.08%. 

Macro Update: As per Stats NZ, food prices rose 1.5% in the 12 months ended December 2024, following a 1.3% rise in the 12 months to November 2024. The increased prices for grocery food and restaurant meals and ready-to-eat food drove the annual rise in food prices, up 2.7% and 3.1%, respectively. The price rise in restaurant meals and ready-to-eat food was because of increased prices for lunch/brunch, hamburgers, and evening restaurant meals.  

Top Market Movers: Among top gainers, General Capital Limited (NZX: GEN) witnessed a rise of 12.24% to end the session at $0.22 per share. On the other hand, Santana Minerals Limited (NZX: SMI) declined by 4.76% to $0.50 per share. 

Commodity Update: The U.S. dollar edged lower on Thursday, retreating from recent highs as U.S. inflation data eased, leading to a drop in bond yields. Meanwhile, the Japanese yen climbed to a one-month high amid growing expectations of a rate hike by the Bank of Japan next week. In commodities, gold rose by 0.30% to $2,726.80, while silver gained 0.33% to $31.63, and copper also increased by 0.33%, reaching $9,202.50. Brent crude advanced 0.4% to $82.33 per barrel, driven by a larger-than-expected decline in U.S. crude oil stockpiles and concerns over Russian energy sanctions. 

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. Since the breakout, the index has been forming higher highs and higher lows and bouncing off a short-term upward trendline established since June 2024 in the last trading session, reinforcing the prevailing uptrend. Meanwhile, the 14-day Relative Strength Index (RSI) is trading above its midpoint, reflecting positive market sentiment in the short-term.  

Our Stance: The robust buying in the IT sector supported the NZ market on 16th January 2025. It seems that the hopes of global investors about the rate cuts from the US Federal Reserve have now been renewed. This is because of the healthy earnings reports as well as inflation numbers. The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4% on a seasonally adjusted basis in December, after increasing 0.3% in November, as per US Bureau of Labor Statistics. Also, the non-alcoholic beverages index declined 0.4% in December, after increasing 1.5% the previous month.  

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